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Strategies & Market Trends : The New Economy and its Winners

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To: Bill Harmond who wrote (4025)	12/17/2000 12:13:21 PM
From: craig crawford	Read Replies (6) of 57684

Was looking at a chart of the Naz and have a couple of observations, FWIW. Nasdaq Comp: intraday high......3/10/00 -- 5132.52 intraday low.......5/24/00 -- 3042.66 closing high.......3/10/00 -- 5048.62 closing low........5/23/00 -- 3164.55 intraday decline = 2089.86 points or 40.71% closing decline = 1884.07 or 37.31% -- Then we had a rally -- intraday low......5-24-00 -- 3042.66 intraday high.....7-17-00 -- 4289.06 closing low.......5-24-00 -- 3164.55 closing high......7-17-00 -- 4274.67 intraday rally = 1246.40 points or 40.96% closing rally = 1110.12 points or 35.08% -- Then another decline -- intraday high.....7-17-00 -- 4289.06 intraday low.....11-30-00 -- 2523.04 closing high......7-17-00 -- 4274.67 closing low......11-30-00 -- 2597.93 intraday decline = 1766.02 points or 41.17% closing decline = 1676.74 points or 39.23% Conclusions: Well if you average the intraday and closing results you get about a 39% decline back in the spring before a significant rally. If you average the results on the second leg down you get a 40% decline. Previously the Nasdaq rallied around 38% averaging the intraday and closing moves. An average of the intraday and closing lows from 11-30-00 is 2560.48 A 38% rally from that level is about 973 points or a move to 3533. Interestingly enough, the last rally that failed in October took the Nasdaq up to 3535, about 2 points away from my extrapolation. So this seems like a likely resistance point. With the large volume on Friday and all the negative sentiment out there, it looks quite plausible to me that we could be putting in a short-term bottom here with a retest of the lows we made on Nov 30th. The FOMC meeting on Tuesday could be just the catalyst the market needs. Tax-loss selling is winding down. Also, the major company pre-announcements we are getting serve to ratchet down expectations which is helpful for putting in a bottom. I can envision a rally for a couple months or more taking us back to 3400-3500 where we would most likely fail and then make new lows. That would still make for a nice tradable rally.

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