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Strategies & Market Trends : The Millennium Crash
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To: Arik T.G. who wrote (5630)1/31/2005 1:58:22 PM
From: Arik T.G.  Read Replies (1) of 5676
 
The NYSE composite index made a new all time high on 12/31/2004 at 7273.18 and closed down a little for that day.
It surmounted the 7202.72 high it made September 2000.

The Russell 2000 had already passed its 3/2000 high in mid November. It also made a new all times high on 12/31 and closed down a little for that day, too.

So, two wide market indices went to alltime high on the low volume holiday period, and broke down on big volume as the new year started.

For the NYSE composite it's even worse. The only period of time it traded above the 2000 high was between 12/23 and 1/3 (the first trading day of the year). On the first trading day of 2005 it already went below the y2k high, closed below it and never faced it again .
So the ONLY period of time the NYSE composite spent above its 2000 high was on the lowest volume period of the year. When volume went back to normal (and above) this index was back below the previous high.
In my book that's a false break, a failure of the up trend.

Looking at a semi log scale monthly chart, the trend that had just failed originated in the '70s, the 1974 low to be exact.
On the same chart it is quite evident that the 2000 high itself was a false break above a 7068 resistance that held from July 1999 till May 2001.

Today the index high at 7088 is inches away from the 7102 resistance it had put lately. Let's see if it holds.

ATG
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