<<A cyber beer if we can predict it down to the week>>
siesmic, I already have my prediction in. I may miss it by a few days. Hope I am wrong and the SUNW earnings spur a rally today, as the 'right shoulder" I have referred to has never really got into gear.
Canadian Stocks: CDN. "MOMO PUPPIES"
Monday, April 10, 2000 4:10 PM
I thought the right shoulder bounce would go for a day or two more, but now, IMHO, I do not see anyway we do not crash this week.
I am a firm believer in trendline support. If you look at the DOW, S&P, and NASDAQ charts you can project trendlines going back to the beginning of 1995, and before, that have held all this time.
In the case of the S&P it was touched (i.e., acted as support) in July/96 and by the awful fall in Aug/98. In the case of the DOW, it was touched in Aug/98 and this year in March. These do not have that far to fall from the current heights.
If, however, you do the same thing with the NASDAQ to find trendline support, you come up with an unspeakably low number that I do not want to even type! The number would basically wipe out the entire period of Internet speculation. I do not think it can fall that far for various fundamental reasons, but it does give one pause.
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The other way to approach this is to bring up long-term charts of the generals like NORTEL, RIM, ORCL, YAHOO, MSFT, and so on. Many of these charts as of a week to two weeks ago were coming off large double-tops or head-and-shoulders formations. The measured targets for some of these are stunning. As you know, I was warning about Yahoo! last week and before. Just take a look at what it has done and where it still has to go to resolve. IMO, others will follow.
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This is a small point, but I do think this affects momo-plays. In a downdraft, the overall strategy IMO should be to fade the breakouts not buy the dips. Just MO and others are more experienced I understand.
--Allan |
