Wave Structure And Near Term Outlook
QQQ has since moved higher in wave ((3)), but a break above $637.01 is still needed to rule out a double correction. From $555.55, wave ((i)) reached $564.45, wave ((ii)) dipped to $557.86, and wave ((iii)) rose to $587.74. Wave ((iv)) pulled back to $582.33. A further rise is expected to form wave ((v)) and finish wave 1 at the larger degree. After that, wave 2 is expected to retrace the move from the 31 March low before the uptrend continues. In the short term, while $555.47 holds, pullbacks may find support in three or seven swings. We are observing the market’s recovery from the corrective low of $555.55 set earlier this year. Looking back, the Nasdaq-100 ETF peaked on October 29, 2025, and the subsequent pullback appears to have established a solid base for the next major advance. This formation suggests the primary trend has turned upward again. Recent economic data supports a bullish outlook, making the case for a new upward wave more compelling. The March 2026 Consumer Price Index report showed inflation cooling to a 2.8% annual rate, slightly below consensus expectations and fueling hopes for a more accommodative Federal Reserve stance later this year. We’ve also seen the CBOE Volatility Index (VIX) fall below 15, indicating reduced fear among investors and making options premiums relatively cheaper.Options Positioning And Key Levels
For derivative traders, this environment suggests using pullbacks as buying opportunities for call options or bull call spreads. The expected minor correction, wave 2, should be viewed as a chance to establish long positions at favorable prices before the next significant leg up begins. This pattern is similar to what we saw in the first half of 2023, when shallow dips were aggressively bought during the start of a new bull cycle. The critical level to watch is the pivot at $555.47, which represents the recent major low. Selling out-of-the-money put credit spreads with strike prices below this level could be a viable strategy to collect premium, capitalizing on the expectation that this support will hold firm. As long as this floor remains intact, the path of least resistance is to the upside. The key resistance remains the October 2025 high of $637.01; a decisive breakout above this price is needed to confirm the bull trend. Traders could structure trades like debit spreads that profit from a move toward and through this level in the coming weeks. The low implied volatility makes buying these directional spreads more attractive than in a high-volatility environment. Create your live VT Markets account and start trading now.
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