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Technology Stocks : Semi Equipment Analysis

SOXX 312.18

-0.2%

Dec 9 4:00 PM EST

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To: Donald Wennerstrom who wrote (44841)	7/25/2009 9:25:06 PM
From: Return to Sender	3 Recommendations Read Replies (4) of 95546

Amateur Investors Weekend Stock Market Analysis (7/25/09) amateur-investor.net The primary Wave Count is that we are going through an ABC corrective rally after seeing a 5 Wave pattern complete with the March lows. The B Wave pullback only lasted about 4 weeks and didn't retrace that much so it will be interesting to see how high the C Wave will eventually go. The next major resistance level for the Dow to the upside is around 9400 which is the 38.2% Retrace calculated from the October 2007 high to the March 2009 low. The Nasdaq has rallied above its 38.2% Retrace calculated from the October 2007 high to the March 2009 low and has a couple of potential upside resistance areas to watch in the weeks ahead. The first resistance area is around 2015 (blue line) which was the 2006 low while the second resistance area would be at the 50% Retrace near 2070. As for the S&P 500 its next area of upside resistance would be at 1014 which is the 38.2% Retrace calculated from the October 2007 high to the March 2009 low. There has been a lot of talk of late that the next Bull Market has begun. Although the rally from the March lows has certainly been impressive I think it's premature to call this an an end to the Bear Market. A couple of things to consider include the following. First the S&P 500 has now rallied back to just above its 12 Month EMA (blue line) which is in the lower 970's. During the past several years the 12 Month EMA has been a key resistance and support area for the S&P 500 going back to the late 1990's. As you can see from 2000 through 2002 the S&P 500 was unable to close above its 12 Month EMA on a monthly basis each time it pierced it (points A) which was then followed by more selling pressure (points A to B). Meanwhile finally in March of 2003 the S&P 500 was able to close above its 12 Month EMA on a monthly basis. Also notice as it moved higher from 2003 through 2007 each time the S&P 500 dropped below its 12 Month EMA it (points C) was able to close back above it by the end of the month. Next Friday is the last trading day for July so depending on how the S&P 500 closes in relation to its 12 Month EMA may tell us a lot about future direction of the market. Meanwhile another thing to consider is the longer term chart of the Nasdaq. The chart below compares the Dow from the 1920's through the late 1930's to that of the Nasdaq from the 1990's through 2009. As you can see these two charts are nearly a carbon copy of each other. Notice the big run in the Dow from 1921-1929 was very similar to that of the Nasdaq from 1991 through 1999. Meanwhile both then sold off severely during the next 2 1/2 years (points E to F) which was then followed by an impressive 5 year rally (points F to G). Next this was followed by another substantial sell off (points G to H) over the next 12 to 18 months which was then followed by another sharp oversold bounce (points H to I). The similarity between these two charts is amazing in my opinion and here are a few more observations to note. First the Dow never retested it's 1932 low which ended up being a significant bottom thus the Nasdaq may have put in a long term bottom in late 2002. Secondly notice after the Dow rallied strongly in 1938 that it stalled out and eventually retested the early 1938 low four years later in early 1942 (point J). Thus if the Nasdaq does continue to follow this pattern then once the current rally ends we could see a very choppy trading environment for 3 to 4 years as the Nasdaq eventually retests the March 2009 low at some point in 2012 or 2013. In 2008 our ETF Strategies worked the best with which had a return of +33% versus the S&P 500 which was down -38.5% for the year. Meanwhile our 401K Strategy finished up +17.3% for the year. Signup for a "Free 4 Week Trial Membership" or save up to 50% on a Premium Membership and you will have access to these Investment Products which include the following: 1. "ETF Daily Buy and Short Signals" which can be used to trade the DIA's, QQQQ's, SPY's and OIH's. Our ETF Strategy returned 33% in 2008. 2. "401K/Thrift Savings Plan (TSP) Timing Service" which can be used to help improve your return in your 401k/TSP Account which was up +17.3% in 2008. 3. The "End of Month Strategy" finished up +36.3% in 2008. This Strategy focuses on the typical End of Month markup by the Institutional Money. 4. "Stocks to Buy List" which can be used with either our Short Term Strategy or Long Term Strategy. In 2007 our Long Term Strategy finished even for the year versus the S&P 500 which was down -38.5%. Our Summer Membership Special for new Members is shown below which are 50% Off our normal Monthly Rate of $39.95

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