Has the Bull Run Its Course?

During 2022 and 2023, stock indexes built a large accumulation structure which subsequently resolved into a bull market uptrend. An accumulation is a ‘Cause Building’ process where the index (and this is the case for individual stocks as well) trades sideways for a period of time. This horizontal structure can be measured using Point & Figure charting to estimate the upward price potential.

There are very few techniques in technical analysis that can estimate price potential quite like the horizontal PnF method. If you were a viewer of StockCharts TV's Power Charting episodes during 2022-23, you are familiar with the PnF analysis of that Accumulation structure for the S&P 500 and the NASDAQ 100 Indexes. Now let’s consider the progress of the bull market uptrend that has been unfolding since 2023.

In the case study above, the Invesco QQQ Trust (QQQ) is used as a proxy for the NASDAQ 100. An important target price was achieved at the end of October, which we profiled in the Wyckoff Market Discussions (WMD) as QQQ prices ascended into the target zone. Prices climaxed into the upper price target of 632 (the PnF touched 636, one box above the price objective). We indicated at the time that major indexes would likely become range-bound, which they did. This was and is a noteworthy event as the entire accumulation PnF count was used up upon achieving the upper 632 objective. So the fuel for the bull market for QQQ was used up! A new Cause will need to form, which the index has been doing since October ’25. The next question to be asked; Will the new Cause be Re-Accumulation or Distribution?

Smaller PnF counts have formed along the way during the bull run. A minor Distribution count in 2024-25 led to the tariff decline. The objective of 404 was reached exactly. Then, a reaccumulation PnF count formed and confirmed the Accumulation price objective of 632. A Wyckoffian refers to this as a ‘Stepping Stone Re-Accumulation Confirming Count’. Such a confirming count adds confidence of the accuracy of the original Accumulation PnF objective.

Now we are faced with an extended range-bound structure for the QQQ ETF. For PnF counting purposes, a completed count would only be available once the index makes a new high or a new trading range low. So any count taken now would likely not be complete as QQQ is almost exactly mid-range. We can conclude that the count objective has grown very large since October. Any significant breakout or breakdown would carry the potential for a significant new trend.

Roman Bogomazov and I will be celebrating our 500^th episode of the Wyckoff Market Discussions on April 1^st. We will evaluate the vertical bar chart and the PnF of this and other indexes that are similarly positioned. This 500^th WMD episode will be a big celebration for us and our Wyckoff Community, and you are invited to attend. A link below will take you to the WMD description page and you will be prompted to register for this absolutely FREE event. See you there!

All the Best,

Bruce
@rdwyckoff

Wyckoff Market Discussion Description Page

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.