We have seen a sharp fall on some US stocks today; a drop come on NASDAQ100 which consists of some very good known technology companies. A drop on NASDAQ100 also caused lower cryptocurrenices which obviously has a lot in common with technology companies because of mining. Correlation is very close, and as you can see NASDAQ100 was the first one that turned lower and then BTCUSD followed the move as well with a slight delay.
Nasdaq100 vs BTCUSD
Well, I warned this week that US market can turn lower, but only if correlation with DAX will hold, which is seen in corrective bounce; ideally making wave C higher now as an ending diagonal.
German Dax, 1h
An ending diagonal is a special type of pattern that occurs at times when the preceding move has gone too far too fast, as Elliott put it. A very small percentage of ending diagonals appear in the C wave position of A-B-C formations. In double or triple threes, they appear only as the final ‘C’ wave. In all cases, they are found at the termination points of larger patterns, indicating exhaustion of the larger movement.
