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Technology Stocks : Semi Equipment Analysis

SOXX 312.18

-0.2%

Dec 9 4:00 PM EST

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To: Donald Wennerstrom who wrote (43275)	2/7/2009 6:51:59 PM
From: Return to Sender	2 Recommendations of 95541

Amateur Investors Weekend Stock Market Analysis (2/7/09) amateur-investor.net Overall the major averages remain in their Triangle patterns I have alluded to the past few weeks. The Nasdaq is now the closest to the top of its Triangle pattern and has risen back above its 50 Day EMA (red line). It's going to be very interesting to see what happens when the Nasdaq touches the top of its Triangle pattern on Monday. Keep in mind the last time the Nasdaq rose above its 50 Day EMA (red line) in early January it sold off shortly thereafter (points C to D). As far as the Dow it actually broke below the bottom of its Triangle pattern early in the week week but rallied back above it on Thursday. However the Dow still remains well below the top of its Triangle pattern and likely will encounter significant resistance early next week at its 50 Day EMA (red line) just below 8500 if it continues higher. The S&P 500 has been holding support at the bottom of its Triangle pattern and is nearing its 50 Day EMA (red line) at the 875 level. One of two things may occur early next week as either the S&P 500 will stall out near the 875 level and then pullback or it will rise above its 50 Day EMA and rally back to the top of its Triangle pattern near 900. Meanwhile looking at the Elliott Waves I see two possible scenario's in the coming weeks. The first scenario is that the S&P 500 has completed the Wave IV up and is currently in the early stages of Wave V down. The 1st sub Wave ended at 804 which is now being followed by sub Wave 2 up that is taking the shape of an ABC pattern which may end near the 900 level and corresponds to the top of its Triangle pattern as talked about above. This would then be followed by sub Wave 3 down with an eventual drop back to or below the 11/21 low of 741. Meanwhile the second scenario is that Wave IV hasn't completed yet and we are beginning the final "C" Wave up after completing the "B" Wave down at the 804 level. If this is the case then the S&P 500 could rally back to around the 1000 level at some point if it were able to rise solidly above the 900 level. At this time it's still not certain which one of these patterns will eventually pan out. Now for those that like market history take a look at the daily chart of the Dow from the 1937 to 1938 time period below. Notice in this chart the 4th Wave developed into a Triangle pattern before the final 5th Wave down occurred. Thus it's possible we could be seeing a similar pattern developing in the S&P 500. The charts seen above are mostly my own while the commentary is Amateur Investors. Their charts do not update while my will so we will be able to follow how accurate the commentary proves to be. RtS

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