Larry, excellent observation: Since 1985 every Nasdaq Bear Market broke the 52 week Low before it was over.
Eyeballing your chart,
geocities.com
It looks as if the market bottoms, measured by touching
the 52-wk low were 3, 4, and 4 years apart. Given the last bottom was Oct-1998 on this scale, should we expect the next bottom in mid-to-late 2001 extending out to late 2002? I'd say given the rapid rise of this last run, the mid 2001 crash is more likely.
Here's the interesting bit: if you measure low to high, from the 52-wk low bottom to the high before the market rolled over, the factors were 2.6, 2.7, and 3.0 on the last three run ups (again this is just approximate). The Oct-1998 bottom was in the 1500 area. 2.6 up from that is 2900 and 3.0 up from that is 4500. Guess what? The NASDAQ already hit 5000 in less than two years (when 5000 was hit, it was a full factor of 3.3 off the Oct-1998 low). But I think we'll all agree the March-2000 top market the end of major manic phase.
If we try to guesstimate where the next 52-wk low touch point will be, it looks like the last two have been about a factor of 2.5 of each other. Using that reckoning, it would say the 52-wk low touch point is in the 3750 area. It would be just a question as to how long it takes to get there (NASDAQ is currently 3663). This little study would project an up/down market, not exceeding 4500 on the upside, and a bottom right about where the market is now, about 1 to 2 years out.
(just some Saturday night musings ...) |
