Current Structure And Key Levels
From the end of wave (X), a decline completed wave W at 24,000. A new wave X then started as a zigzag, with wave ((a)) rising to 25,217.5. Wave ((b)) is now under way as a pullback. It is correcting the move that began from the 9 March 2026 low. If the pivot at 23,994.8 holds, the index may rise in wave ((c)) to finish wave X. After that, the broader move is expected to continue lower. We see the current pullback from the March 9, 2026, high as a temporary and corrective phase. This dip appears linked to the recent February 2026 Consumer Price Index data, which at 3.4% came in slightly hotter than anticipated, causing some short-term profit-taking. As long as the Nasdaq holds above the critical 23,994.8 pivot level, the structure favors another move higher in the coming weeks. This outlook suggests traders could position for a short-term rally, which we are labeling wave ((c)). Using strategies like buying call options or deploying bullish call spreads could capture this expected, but temporary, upward move. Conflicting economic signals, such as February’s solid job creation being offset by a rise in the unemployment rate to 4.1%, support the view that this will be a limited, corrective rally rather than the start of a new, sustained bull market.Broader Risk And Downside Bias
The larger pattern since the peak on October 30, 2025, remains a complex correction that is ultimately expected to resolve to the downside. Traders should therefore watch for signs of this anticipated rally stalling, as that would signal the time to shift toward bearish positions like buying puts. The CBOE Volatility Index (VIX) hovering around 19 reflects this underlying uncertainty and suggests that significant risk remains after any near-term strength fades. This type of choppy, sideways price action is not unusual after a major market top, reminiscent of the consolidation we saw in prior post-bull run periods. Looking back from our current standpoint, the high set in late 2025 marked a significant turning point into this corrective phase. The broader market continues to grapple with the prospect of interest rates remaining higher for longer than previously hoped, capping any significant upside potential for now. Create your live VT Markets account and start trading now.
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