Though I think it's clear that risk to the Nasdaq comp of the mid 2000s or lower has recently become a lot easier to envision, I don't see meaningful head-and-shoulders formations in the Nasdaq Comp or the NDX. Perhaps if you could be more specific about dates/price levels/time frames/volume, I might have a better chance of seeing what you're seeing. I have noted recent claims to the same effect, but the specified patterns lacked the characteristics (spacing, definition, signal clarity, placement within prevailing trend, volume patterns) that I would look for. The NDX, in particular, is difficult to assess in isolation, since the exchanges don't seem to publish NDX volume statistics. I suppose you could look to the QQQ or make a fair guesstimate as to aggregate component volume, or, if you were really determined, you could add it all up to the last share - might be a project for another day.
As for doomsday, I'm not normally the kind of person to set arbitrary lower (or upper) limits for what might lie ahead, but it's too nice out here in Cali this weekend for me to contemplate the end of everything. My guess is that a new leg down on the Comp to '98 levels would require further reinforcement of the bear case: not just a manufactured slowdown, but a true recession; not just some re-consideration of financial practices and some shortfalls relative to overly optimistic projections, but a new round of concatenating disappointments and disasters; not just some vexing and distracting political uncertainty, but a true political crisis. |
