Has anyone looked at target levels of the NAZ/NDX, if the SOX was to break below 500 and retrace all the way back to the OCT 1998 lows around 200. Im not predicting, just what if.
Right now the NAZ is already below the 1998 peak which was around 2000. At about the same time that the NAZ was around 2000 back in 1998 the SOX was only in the 300 region, but right now its around 500. So the SOX is now strongly higher than the NAZ as compared to the peak levels in 1998 prior to the big selloff into the bottom of OCT 1998.
Lets make an awful assumption, just for discussion, that most of the indicies could drop back to the OCT 1998 lows, which for the NAZ was around 1350 and for the NDX was 1063.
If the SOX, was to retrace all the way back to 200, I am suspecting that the NDX could drop below 1000. Now what if the BTK and RUT, which are holding up stronger than the NAZ/NDX, also join in with the SOX and revisit their lows of OCT 1998, then it may not just be a slight break of 1000 but could break it by several hundred points.
In the past I mentioned that I felt 1063 was the MAXIMUM LOW for this bear market on the NDX, however Im no longer that confident.
Remember the RUBBERBAND analogy - what gets pulled in one direction will get a similar reaction in the opposite direction. Pull it too strong in one direction the reaction could be also too strong in the opposite direction, and if it is really pulled too strong it may just break. I guess one could say that the market is suffering now due to all that greed.
It was only a year ago when we were hearing terms from analysts:
- ITs THE NEW ECONOMY STUPID!!!
- NAZ 6000, NAZ 8000
- DOW 15000
- YOU ARE LOSING MONEY IF YOU ARE IN CASH
- THE NAZ WILL NEVER DROP BACK BELOW 4000, then 3000
Im not saying to blame all those analysts totally, since its the individual that needs to take blame for their own greed. What the analysts can be blamed for is if they made those comments to manipulate the market/had alternative agendas, and one example is the PUMP and DUMP scheme, which Im sure some did. Lets remember those analysts. |
