Plus or Minus 1 Day Analysis, February 4, 2000
Last Friday we stated the following: "We believe the Dow is near the next short-term low. That low should be seen near February 1, plus or minus 1 day. So a low is likely we believe by Monday on Tuesday. The low in this time frame should be followed by a rally into February 7, plus or minus 1 day and then we should see a brief decline into February 9, plus or minus 1 day, and then another rally into February 11, plus or minus 1 day. From there another brief correction is likely."
The Dow in fact reached a low of 10701 on a print basis on
January 31, within one day of our February 1 target. We have since rallied 417 points from that low to a high of 11118 this week. The Nasdaq fell 12.87% from its 4303 print high to a low of 3748 on January 31, again, within one day of our target for a low. We stated on our nightly subscriber hotline update on January 31 that we did not agree with the Bears who were then claiming a major top in the market had been seen. We specifically stated that we expected the Nasdaq to rally back to new all-time highs. The Nasdaq did in fact rally back to new closing highs this week.
We believe the market will see a brief correction into early next week and that the correction could test the prior lows at 10701 in the Dow. The correction should bottom near February 15, plus on minus 1 day. From there we look for another rally to higher highs into February 24, plus or minus 1 day and then a pullback into the end of the month.
Despite the probability of a correction in the market early next week, we look for the Dow to rally up fairly close to the prior all-time highs before the month of February is out. Unless the Dow exceeds 11910 intraday this month there will then be another fairly steep pullback. However, despite any corrections this month we believe the Dow will ultimately rally to new all-time highs between here and April. We recommend continuing to hold long positions. We will tell subscribers on our hotline next week when we believe the next important bottom is in. That will be the time to start new buying. |
