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Strategies & Market Trends : Classic TA Workplace

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To: skinowski who wrote (131087)	3/23/2006 7:26:32 PM
From: Perspective	Read Replies (2) of 209892

Similarities between today's bubble poster child $HGX and the $NDX in 2000: ============ Yes. In my mind, the ideal short entry was NOT March 2000. Nobody with any respect for market momentum would have done that. One had to wait for the extreme weakness in April 2000 to see that the bubble was bursting. Then the optimum short entries were the 38% or 50% retracement levels hit three times, in June, July, and August. stockcharts.com Alternately, one could have witnessed the destruction going on in tech and used it to time a near perfect $SPX short entry at the end of August 2000: stockcharts.com You would have sold within a few percent of the all-time high. I guess I view the housing sector as the focal point of the present debt bubble, much as tech was the focal point of the debt bubble in 2000. So, I would argue that the wisest course is to watch for real downside momentum in homebuilders, and then short them near a corrective retracement. Also, short stocks in downstream industries when the homebuilders are at that point. Actually, it's curious that the Jan2006 high is five months after the peak here: stockcharts.com much as the August 2000 high is five months after the peak here: stockcharts.com $HGX retraced further, around 80% compared to $NDX 60%. But the general idea is the same. Hmmmm....... BC

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