QQQ bottomed on 31 March 2026 at $555.55, then rose in wave (1) to $722.03 before wave (2) ended at $695.25. The advance that followed was labelled wave (3) and mapped as an impulsive Elliott Wave sequence: wave ((i)) finished at $706.49, then wave ((ii)) at $700.20, before wave ((iii)) reached $737.60. After that, wave ((iv)) retraced to $725.27 and wave ((v)) extended to $748.65, completing wave 1 of the higher-degree cycle.
QQQ is now in wave 2, correcting the cycle from the 19 May 2026 low. Wave ((w)) ended at $741.01 and wave ((x)) peaked at $745.76, while wave ((y)) is projected to find support between $733.60 and $738.20. A key pivot sits at $695.18; while it holds, pullbacks are framed as corrective within a move that can take 3, 7, or 11 swings.
Positioning for the Next Move Higher
Given the current pullback in the Nasdaq 100, we see this as an opportunity to position for the next move higher. We are looking to enter bullish positions as the QQQ approaches the target support zone of $733.60 to $738.20. Using options, this could involve selling out-of-the-money put spreads or buying call spreads to capitalize on the expected rebound.
This market weakness appears linked to the robust May 2026 jobs report released last week, which showed the economy adding 255,000 jobs against an expectation of 190,000. This strong data has temporarily dampened hopes for an imminent rate cut from the Federal Reserve, causing this orderly profit-taking. However, we view this as a short-term reaction within a larger, fundamentally sound uptrend.
Fundamental and Technical Backdrop
Underlying strength remains, as corporate earnings from the tech sector continue to beat expectations, driven by sustained investment in AI infrastructure. Furthermore, the latest Consumer Price Index (CPI) reading showed core inflation cooling to a 2.8% annual rate, suggesting the Fed’s policy is working. This backdrop supports the idea that any dip caused by strong employment figures will be short-lived.
Historically, in strong bull markets like this one, pullbacks of 2-4% are common and healthy before the next leg up. The current drop from the $748.65 peak fits this pattern perfectly. With the Volatility Index (VIX) holding steady near a low of 14, there is little fear in the market, which further reinforces our view to use this dip as a buying opportunity.
Our strategy is to watch for price stabilization within our target support zone before initiating new positions. We will use the $695.18 pivot as our key risk-management level for any bullish trades. As long as that support holds, the structure strongly favors a resumption of the primary uptrend once this corrective phase concludes.
