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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: AllansAlias who wrote (24355)10/4/2000 1:17:12 AM
From: Oblomov  Read Replies (1) of 436258
 
Portrait of a Bear Market

Here is a set of charts that I put together to study the Nasdaq/NDX spread (NNS). I define the NNS as the difference between the closing prices of these two indexes (Nasdaq Composite - NDX). I have analyzed the data from two perspectives:

1) from a topological perspective. As you can see, the NNS moved upward in three bull stages during 1992-1998. The stairstep ascent of the NNS during 1992-1998 perfectly matches the underlying momentum of the Nasdaq bull market. The NNS topped out in April of 1998, and we have since completed two bear legs, again in a stairstep fashion that mimics the underlying bearish momentum of the Nasdaq:

geocities.com

I will go out on a limb and predict that, in the name of symmetry, there is a third bear leg in the NNS that is yet to come. And, further, I predict that during this third leg, the NNS will go negative, i.e. the Nasdaq composite will trade lower than the NDX for the first time ever.

2) from a technical perspective. The bull market began in late 1991 and was confirmed during 1992. The bear market began in April 1998 and was confirmed in March 2000 by a failure to surmount the bull trendline from 1992-1998. Look at the massive H&S formation that the NNS broke down from! In any case, the NNS is now trapped under the support active during 1986-1991.

geocities.com

Also, another topological consideration: note how sloppy and erratic the post-1998 NNS is! This is quite a contrast to the smooth character of the 1992-1998 NNS.

Comments, anyone?
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