Cents and Sensibility - Kimberly and Friends' Consortium Message Board

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Strategies & Market Trends : Cents and Sensibility - Kimberly and Friends' Consortium

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To: stan s. who wrote (58447)	1/6/2000 9:27:00 PM
From: stan s.	Read Replies (5) of 108040

Nasdaq, the chart, a few random thoughts and then my thoughts on areas likely to hold. The worst recent tank for the Naz was roughly 25% from July to October of '98. That was unusual, most are in the 10-15% range. When that 25% correction ended The Naz immediately began a surge that was 2nd only to the one we've just experienced. It went from about 1500 to 2500 almost without pause...a better than 60% gain. If this correction were to equal a drop of that nature...it would carry us to about 3150. Hell, that only takes us back to early November. It would feel far worse than the reality. That prior drop in '98 found support. The Naz does not have support around 3150 if it were to drop 25% so worst case scenario would be a further drop to fill a gap at 2880 and then scramble to support around 2900. People that know me, know that I hate gaps, they always make me look over my shoulder but the fact is they don't have to be filled...it's only when a leg down gets close, that it becomes likely that a fill will occur. Right now, the odds favor a higher support area. Here's a chart of the Nasdaq showing realistic support. Keep in mind that support in the "gap from" area is relatively weak, (top of the fat part of the candle). geocities.com So what are the realistic possibilities? In my opinion you go one step at a time with the support that rests under the current price. We tested some support today and held. This is weak support. Failure to hold near term support at close at around 3715 would likely mean a test of the next gap which incidently coincides with a 38% Fibo retrace at about 3620. If that doesn't hold at a close then the Naz will likely drop and test slightly stronger support at 3450-3460. So the most likely ares to test and most likely hold in the coming days are the 3620 mark or failure to hold their at close then 3450 IMHO. I think a drop further than the last figure would require negative news not yet on the scene. By the way these figures are not exact since we're dealing with large numbers and yes there are other support areas and ways to measure support. I'm presenting what I consider a simple, yet fairly accurate assessment. If we're very lucky, today holds but it's not likely and remember even if we get an up day tomorrow it does not mean it's over. All of the above is my opinion only. Stan

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