NAS100 (Nasdaq) Technical breakdown (1d) (4h)
1D Chart Analysis (Left Panel)
Wyckoff Methodology
Phase B (Distribution): The chart highlights that we're in "Phase B" of Wyckoff's distribution. In a distribution phase, institutional players begin selling positions, offloading shares to retail traders. The Upthrust (UT) in Phase B is a key component, signaling an upward fake-out or liquidity grab to distribute larger orders before a sell-off.
ST (Sign of Weakness): This is marked in the earlier phase of the cycle, and it's typically the initial sign that buyers are losing momentum. The ST is followed by a Secondary Test (D) where price retests near highs before sellers gain control.
PSY (Preliminary Supply): This is marked during the earlier phase of the structure, indicating an initial area where larger players began testing the supply of the asset. This is followed by a Buying Climax (BC), a strong upward movement followed by institutional selling.
Elliott Wave Analysis
Wave 5 Completion: The chart labels the peak as the completion of Wave 5 of a larger Elliott Wave structure. The completion of Wave 5 indicates the end of an uptrend, potentially signaling a new downtrend or a larger correction.
Bearish Harmonic Pattern: The chart includes a harmonic pattern indicating a strong reversal structure. Harmonic patterns often lead to price reversals at specific Fibonacci levels. The extension to 1.618 Fibonacci is a key reversal zone, suggesting exhaustion of the bullish trend.
Key Levels
Invalidation Points: In the harmonic structure, invalidation levels are shown at 20,362.5 and 20,219.3. These levels are critical to determining whether the bearish case is still valid. If price moves above these levels, the harmonic pattern is invalidated, and a bullish scenario may reemerge.
4H Chart Analysis (Right Panel)
Smart Money Concepts (SMC) and ICT Methodologies
Break of Structure (BOS): The chart on the 4H side highlights a BOS (Break of Structure) on the internal timeframe, signaling a bullish shift in the short term. In this case, the market has broken a bearish structure and is now showing a temporary bullish trend.
Liquidity Inducement (Wave A Inducement): The Inducement Wave A label suggests a classic ICT concept where liquidity above prior highs is engineered before price moves lower. This is often where retail traders are trapped in the wrong direction before larger players push price in the intended direction.
Order Blocks: There appears to be the identification of sell-side and buy-side order blocks. An Order Block (OB) is a price area where institutional buying or selling occurs, acting as strong support/resistance zones. These order blocks represent key price levels where liquidity is concentrated.
Harmonic Pattern (Bearish)
The bearish harmonic pattern remains in play on the 4H chart. The symmetry of this pattern combined with the Fibonacci retracement levels suggests that price may reverse around the 1.236 extension or fail near 1.325.
Market Structure and Trends
Markup Phase: The right-hand side of the 4H chart suggests that price is undergoing a Markup Phase, with internal swing highs being created. This is a period of rising prices after a consolidation or accumulation. It indicates that, although the macro view (1D) shows potential for a downtrend, the short-term bullish momentum could play out for a while.
LPSY (Last Point of Supply): This term indicates the final area where sellers take control before a significant move lower. This is highlighted in both the 1D and 4H charts, suggesting that this area will act as strong resistance in the coming price action.
Summary of the Break down
1D Timeframe: larger Wyckoff Distribution is playing out, with Wave 5 completing in an Elliott Wave structure. This suggests that the market has reached an exhaustion point, and we may expect a reversal or correction soon. The harmonic pattern also reinforces this bearish outlook, with specific invalidation levels providing a framework for risk management.
4H Timeframe: The shorter-term view on the 4H chart highlights bullish momentum due to a Break of Structure and the beginning of a Markup Phase. However, this may only be temporary, given the broader bearish structure visible on the 1D chart.
Key Reversal Zones: Pay attention to the harmonic pattern extension levels and BOS zones. If price moves beyond the invalidation points, the bearish thesis may fail, and a new bullish trend could develop.
Liquidity Traps and Institutional Activity: The SMC concepts like inducement and order blocks suggest that liquidity is being engineered around key price levels. Traders should be cautious about potential false breakouts or traps before a major directional move occurs.
Wyckoff Methodology
Phase B (Distribution): The chart highlights that we're in "Phase B" of Wyckoff's distribution. In a distribution phase, institutional players begin selling positions, offloading shares to retail traders. The Upthrust (UT) in Phase B is a key component, signaling an upward fake-out or liquidity grab to distribute larger orders before a sell-off.
ST (Sign of Weakness): This is marked in the earlier phase of the cycle, and it's typically the initial sign that buyers are losing momentum. The ST is followed by a Secondary Test (D) where price retests near highs before sellers gain control.
PSY (Preliminary Supply): This is marked during the earlier phase of the structure, indicating an initial area where larger players began testing the supply of the asset. This is followed by a Buying Climax (BC), a strong upward movement followed by institutional selling.
Elliott Wave Analysis
Wave 5 Completion: The chart labels the peak as the completion of Wave 5 of a larger Elliott Wave structure. The completion of Wave 5 indicates the end of an uptrend, potentially signaling a new downtrend or a larger correction.
Bearish Harmonic Pattern: The chart includes a harmonic pattern indicating a strong reversal structure. Harmonic patterns often lead to price reversals at specific Fibonacci levels. The extension to 1.618 Fibonacci is a key reversal zone, suggesting exhaustion of the bullish trend.
Key Levels
Invalidation Points: In the harmonic structure, invalidation levels are shown at 20,362.5 and 20,219.3. These levels are critical to determining whether the bearish case is still valid. If price moves above these levels, the harmonic pattern is invalidated, and a bullish scenario may reemerge.
4H Chart Analysis (Right Panel)
Smart Money Concepts (SMC) and ICT Methodologies
Break of Structure (BOS): The chart on the 4H side highlights a BOS (Break of Structure) on the internal timeframe, signaling a bullish shift in the short term. In this case, the market has broken a bearish structure and is now showing a temporary bullish trend.
Liquidity Inducement (Wave A Inducement): The Inducement Wave A label suggests a classic ICT concept where liquidity above prior highs is engineered before price moves lower. This is often where retail traders are trapped in the wrong direction before larger players push price in the intended direction.
Order Blocks: There appears to be the identification of sell-side and buy-side order blocks. An Order Block (OB) is a price area where institutional buying or selling occurs, acting as strong support/resistance zones. These order blocks represent key price levels where liquidity is concentrated.
Harmonic Pattern (Bearish)
The bearish harmonic pattern remains in play on the 4H chart. The symmetry of this pattern combined with the Fibonacci retracement levels suggests that price may reverse around the 1.236 extension or fail near 1.325.
Market Structure and Trends
Markup Phase: The right-hand side of the 4H chart suggests that price is undergoing a Markup Phase, with internal swing highs being created. This is a period of rising prices after a consolidation or accumulation. It indicates that, although the macro view (1D) shows potential for a downtrend, the short-term bullish momentum could play out for a while.
LPSY (Last Point of Supply): This term indicates the final area where sellers take control before a significant move lower. This is highlighted in both the 1D and 4H charts, suggesting that this area will act as strong resistance in the coming price action.
Summary of the Break down
1D Timeframe: larger Wyckoff Distribution is playing out, with Wave 5 completing in an Elliott Wave structure. This suggests that the market has reached an exhaustion point, and we may expect a reversal or correction soon. The harmonic pattern also reinforces this bearish outlook, with specific invalidation levels providing a framework for risk management.
4H Timeframe: The shorter-term view on the 4H chart highlights bullish momentum due to a Break of Structure and the beginning of a Markup Phase. However, this may only be temporary, given the broader bearish structure visible on the 1D chart.
Key Reversal Zones: Pay attention to the harmonic pattern extension levels and BOS zones. If price moves beyond the invalidation points, the bearish thesis may fail, and a new bullish trend could develop.
Liquidity Traps and Institutional Activity: The SMC concepts like inducement and order blocks suggest that liquidity is being engineered around key price levels. Traders should be cautious about potential false breakouts or traps before a major directional move occurs.
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