Nasdaq 100 (NQ1!) Short Trade Plan: Elliott Wave Top and ROC Divergence

Published: 22nd October 2026

The Setup

The Nasdaq 100 may have completed its rally. The Elliott Wave count shows five waves to the upside, which can mark the end of a trend.

What the Daily Chart Shows

• Five waves complete. The advance from the April low has five clear waves, with wave 5 peaking in early October.

• Momentum divergence. Price made a higher high in October, but the ROC indicator made a lower high. Momentum is weakening as price rises, which often comes before a reversal.

What the Lower Timeframe Shows

• Five waves down from the high may be complete.

• A wave 2 pullback looks to have followed.

• Wave 3 to the downside could start next. Wave 3 is usually the strongest move.

[Insert NQ1! chart here]

Trade Parameters

• Entry: short on a daily close below 29,226

• Stop loss: 31,616.50

• Target 1: 27,202

• Target 2: the 25,000 area, at the 2.0 Fibonacci extension

• Plan: leave the trade open toward target 2 while the downtrend continues

Risk to the Trade

If price closes back above 31,616.50, the count is wrong and the trade is closed. Strong earnings from the large tech companies could also push the index higher and invalidate the setup.

This is not financial advice. All trades carry risk. Always do your own analysis and manage your position size.