Back on April the 24th it looked like the Nasdaq would peak in the next week or two. It did not. The explanation is quite simple that the wave 4 became a triangle and as a consequence spent an inordinate amount of time going sideways. We show a model of a diagonal which is essentially a 3-3-3-3-3 5-wave structure that often does not have alternation between waves 2 and 4. It is therefore impossible to anticipate a triangle and in the interest of the bigger picture, that is the rather violent return to the base, it is much preferable to err on the side of caution by choosing the earliest possible date. This time that proved to be wrong as we did get a triangle and that consumed an additional two months, at least in the Nasdaq.
Yesterday Yellen played the Greenspan game by saying nothing and taking a long time to do it. After thinking it through the market decided that that was good for another 78 Nasdaq points today for an all-time intraday high. The upper trend-line of this wedge, which has a total of six points on it may get it’s seventh point at around 5300.
For trading purposes all this doesn’t matter all that much as the ultimate goal is the base, so the gain simple gets bigger as this goes higher without appreciable greater risk. The QQQ may peak at around 113 or so and then a Dec. put with a strike at around 100 should be available for less than $2. It is bound to be worth a multiple of that by December.