Gersh, Chat & Chew from the Swamp
I'm a little on the busy side getting ready for the next phase in a legal battle, but wanted to share some observations.
As all the Dudes know, I long ago came to believe in the concept of pivot points. Let me share my insights into this issue on the NDX.
All the action in NDX IMHO has been contained to seven trading channels since the beginning of time on the weekly charts.
Principle channel - Current Value ~~2520 x ~~3180
This was the trading channel from 1/96 to 10/98. It is defined by a line drawn from 1/12/96 to 10/31/97 and on the daily chart, the low of 11/29/00 rested on this line. Then the GTW news came out and all hell broke loose. It also corresponds to the lower value of the QQQ down trend of $63 that I cited in my 10/31 post (although that level would now be about $61).
The upper line on this chart is defined by connecting a week in 1/97 to 8/13/99. As I remember, the high of 11/17/00 used 3180 as resistance. This roughly corresponds to the middle fork of the QQQ of $80 that I suggested on 10/31 (again, a little lower now).
There is a interim fork in this channel that I currently show at ~~2980, created by using 2/9/96 and 8/21/98 to draw the line.
High Channel - ~~3180 x ~~3800
Created by connecting 1/29/99 and 7/16/99 and extending the results. It always concerned me that NDX jumped the channel in late 1998, but it was obvious that this new channel was created using the top of the old channel as support.
Excessive Speculation
There are two levels above the high channel that simply are not, at this time, worthy of commenting on. While I noted it at the time, I did not appreciate the eventual implications when it jumped into these levels about 11/12/99.
Low Channel - ~~2350 x ~~2520
If 2520 doesn't hold then what? Well, connect 7/19/96 and 9/4/98 and you'll understand that we've been in this channel before.
Excessive Depression - ~~2180 x ~~2340
It is noted that we've also seen this channel before. It has the weakness of being created as a two point line connecting 4/18/97 and 10/9/98. While I don't anticipate we will visit here, the Dudes have seen this before. The combination of tax loss selling, continued election uncertainty, the decline of the dollar, and some more earnings warnings and we certainly could visit this bottom. Frankly, I hope we do, as I'd relish the buying opportunity, assuming I've still got a portion of a Phleet left.
In the meantime, as I keep telling TM, don't shoot until you see their bloodshot eyes. Translation - wait for the down trend line to be broken. Take the time, draw the lines, and good hunting!
Just a View from the Swamp
Enjoy,
TB |
