The Nasdaq 100 (NDX) last traded at 29,538, up 1.2% on the day. On the daily chart, the 20-period, 2-standard-deviation Bollinger Bands remain compressed: upper band near 30,280, midline at 29,443 and lower band near 28,600. That roughly 1,680-point width is markedly tighter than the expansion that accompanied the May–early-June advance. Such squeezes typically resolve with an outsized directional move once price escapes the bands. The MACD has flattened near the zero line with a shrinking histogram, consistent with coiling rather than trending. See Figure 1 below.
Figure 1
The primary Elliott Wave labeling treats the early-June high near 30,762 as the end of a larger-degree wave 3. The subsequent overlapping a-b sequence through June and July is viewed as the start of a complex, flat, wave 4. A five-wave decline into late July was followed by a rebound that subdivided into i-ii-iii-a-b-iv. Current price action can be counted as a potential completing “small gray W-v,” to ideally 30,500-30,750.
Once the gray W-v completes, the preferred path then projects a decline that would complete the larger fourth wave, with the dashed trajectory targeting around 26,700s for a “c=a”. That level coincides with the rising 200-day SMA.
An equally valid alternative is that the entire advance from the late-July low is merely a second-wave bounce inside a larger impulsive decline that began after the June high. See Figure 2 below. Fibonacci retracements of the most recent decline place 50% at 29,520, 61.8% at 29,680, and 76.4% at 29,870—levels the index is now testing.
Figure 2
In that case, the current rebound would exhaust near the 29,677–29,934 cluster, after which a third-wave sell-off would target the 27,732 (161.8%) extension and ultimately the same 26,900 area already marked as wave 4 on the preferred count. This alternative remains viable only while price stays below 30,195. A move above the third (orange) warning at 29,934 already constitutes a serious caution. A break of the fourth (purple) warning at 30,195 would invalidate the “wave-2-then-lower” scenario and shifts our focus entirely towards the more constructive “W-v” count.
Warning Levels and Resolution of the Squeeze
For the bears (upside invalidation of the larger decline):
- 29,934 (orange – serious warning)
- 30,195 (purple – 4th warning; alternative wave-2 count off the table above here)
- 30,762 (June high)
For the bulls (downside risk to the bounce):
- 29,288 / 29,068 (61.8% retracement cluster)
- 28,598 (lower Bollinger Band / 100% level)
- 27,732 then 26,900
Bollinger Band squeezes do not forecast direction; they forecast that the next range expansion will be larger than recent trading. Combined with the two Elliott Wave possibilities, the index is at an inflection. A decisive close above 30,195 would favor the bulls and neutralize the immediate “wave-2-then-crash” path. Failure to hold the 28,608–29,109 zone, followed by a break of the lower band, would increase the odds that the (green) third-wave decline is underway. Until one of the band extremes or the key warning levels is taken out on expanding range, the Nasdaq 100 remains coiled. The next several sessions are likely to resolve both the volatility squeeze and the wave-count ambiguity.
