Zeev,
Is this how you got your bottom estimate?
Comments?....).
I also realize we must re-trace some of the recent run-up. If based on technical analysis, what is the exact basis? Backing and filling of gaps? Trend lines? Can someone please spell this out in detail for me, as I am not experience in Chart Reading.
On October 9, 1998 the Nasdaq bottomed at 1419.11 (the last big dip). The Nasdaq peaked on March 10, 2000 at 5132.52. A retracement is by taking a percentage drop from 5132 back to 1419.
According to John J. Murphy in "The Visual Investor", the most common retracement figures for a market correction are 33%, 38%, 50%, 62%, and 66%. The Fibonacci ratios are 38% and 62%.
Using those retracements gives the following prices for the Nasdaq:
33% = 3,907 (already broken)
38% = 3,721 (already broken)
50% = 3,275 (already broken)
62% = 2,830
66% = 2,682
Retracements of 66% are considered severe. If it retraces more than that, then a total trend reversal is most likely taking place (i.e. changing from a positive Bull trend to a negative Bear trend). So technically, the Nasdaq could retrace back to 2,682, then reverse itself and begin another climb without ever being in a "bear market" trend. It would just be a severe correction within a bull market trend. Look at the Tokyo Nikkei Index for a bear market trend since 1990 - ouch!
-surfcr8z |
