A friend sent me this, interesting technical analysis, don't know the author, some CFA from NY.
9/27/00
NASDAQ most likely completed the second and final up leg of its upward correction from its May 24 low of 3043 at 4289 July 17. It is a notable negative that this was an almost exact fibonacci .618 retracement of the 2046 point first leg down. It now appears NASDAQ completed the first leg of a new decline August 3 at 3521. We believe the rise from that low topped out at 4259 September 1, slightly higher than expected, and the next major decline has now begun. We continue to believe that this decline, as part of a 2-3 year bear market, should take NASDAQ down to 2780 by late October after completing one more rally to 4050-4120 by October 2. Only a close above 4861 would cause us to reverse our long-term bearish stance.
We now believe the SPX has most likely completed the advance from October 1999 in a triangular series of tops. The third of these tops, September 1 at 1530, was a failure high, as it did not exceed the March 24, second top of 1552.9 As its wave count is now complete going back to 1990, we believe the SPX should now decline to at least 1290 in the first major decline of a 2-3 year bear market by late October, after completing one more rally to 1496-1508 by October 2. Only a close above 1552.9 would cause us to reverse our long-term bearish position.
We continue to call our listeners' attention to the intermediate and long-term cyclical situation of the stock market. First, the 22-week bottom/top cycle, which correctly called last March's top, now is in its 23rd week from the April 17 bottom. This cycle, therefore, indicates an early to mid-September top, most likely already in, and a late October/early November bottom. Second, the 3.75-year cycle, which last bottomed in October of 1998, calls for a top in the second half of 2000, most likely already in, and a bottom not until June of 2002. Both cycles combine to confirm our Elliott Wave conclusions as outlined above and below.
We therefore advise taking profits where they exist and would look to leg into short positions in the following "sweet 31" on the current rally: ARBA,ITWO, ARTG, NTAP, BRCM, BRCD, RBAK, JNPR, ADBE, SEBL, CIEN, VRSN, JDSU,SCMR, GLW, SAPE, PWER, NT, SONS, MUSE, AMCC, TIBX, VRTX, NUAN, ADI, INFA,ATON, CHKP, BEAS, EXTR and DST. We would cover them at NASDAQ 2850.
The following discussion is for those more sophisticated listeners and investors interested in our actual Elliott wave count. It now appears that NASDAQ completed wave 5 of 5 of V March 24 at 5079. Further, it appears NASDAQ completed wave 1 of 1 at 3043 May 24, wave 2 of 1 July 17 at 4289, only 12 points less than an exact fibonacci .618 retracement of wave 1 of 1, wave 1 of 3 of 1 at 3521 August 3, wave 2 of 3 of 1 at 4259 September 1 and wave 1 of 3 of 3 of 1 at 3615 last Friday. We now expect wave 2 of 3 of 3 of 1 to rise to 4050-4120 by October 2 and wave 3 of 3 of 1 of a 2-3 year bear market to then drop to 2780 by late October. A close above 4861 would cause us to alter this wave count.
We believe it is likely that the SPX completed wave 4 of V last October at 1233 and most likely completed wave c of E of V July 17 at 1517.3. Further,the SPX appears to have completed wave d of E of V at 1414 July 28, wave e of E of V, the final wave of the diagonal triangle begun in October of 1999,at 1530 September 1, a failure high as it did not exceed the March 24 wave C of V high and wave 1 of 1 at 1421 last Friday. We now expect wave 2 of 1 to rally to 1496-1508 by October 2 and wave 3 of 1 of a 2-3 year bear market to thereafter decline to 1290 by late October. A close above 1552.9 would cause us to alter this wave count. |
