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Strategies & Market Trends : P&S and STO Death Blow's
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To: ajtj99 who wrote (2948)6/28/2002 10:05:03 PM
From: exp  Read Replies (2) of 30712
 
Paul, I think that I found a possible analogy on the charts between the current retest of Sept 01 lows and an earlier situation.

I am referring to the retest of major March 2000 (May 2000 resp.) lows on SPX/DOW (COMP/NDX resp.). The retest occurred in Oct 2000 and was largely successful for a few weeks (except that "pierce and sucker" on various indexes occurred then) until the break in Nov 2000. See the weekly charts for the best view.

I believe that Sept 01 lows may be similarly defended right now (with "pierce and sucker" occcurring on SPX and COMP) for a short few weeks and then by the end of July we resume a further drop on all indices. Notice how VIX has now reached a similar level as in Oct 2000 (which was exceeded later on in 2000).

So the lows of this week may largely hold on the main indexes supporting a rally/bounce advocated by Zeev and others a la Feb 2002 rally/bounce. Once this is over we resume further decline toward COMP 1200-1300.

All this is based on conjectural evidence of a desire by major market players to maintain the illusion of a successful retest of Sept 01 lows. In any case, a limited pause in a 6-month long decline at this important Sept 01 low level seems likely.

I would be interested in your thoughts on this.
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