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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Return to Sender who wrote (9703)	5/6/2003 9:29:41 PM
From: Return to Sender	Read Replies (1) \| Respond to of 95646

Amateur Investors Mid Week Market Analysis (5/6/03) amateur-investors.com I thought this week I would show some historical perspective of what the Dow looked like in the 1920's and 1930's and compare that to what the Nasdaq has done since 1990. From 1924, when the Dow was around 100, until the Dow peaked in 1929 around 375 it appreciated near 275% over a 5 1/2 year period before crashing in late 1929 and losing 87% of its value from late 1929 through 1932. Meanwhile the Nasdaq which really started to take off in 1995, when it was near 1000 peaked in early 2000 just above 5100 and appreciated nearly 400% over the 5 year period before selling off severely as well and losing 78% of its value from 2000 through 2002.. To me it's remarkable how similar the two charts look as shown below. Also notice what happened to the Dow after it finally bottomed in 1932. It was followed by a steady up trend through 1936. As shown by the table below the Dow suffered horrific losses from 1929-1932 but then had four consecutive up years from 1933-1936. Can the Nasdaq pull off a similar feat from 2003-2006? Year Dow Year Nasdaq Return Return 1920 -32.9% 1990 -17.8% 1921 12.7% 1991 56.8% 1922 21.7% 1992 15.5% 1923 -3.3% 1993 14.7% 1924 26.2% 1994 -3.2% 1925 30.0% 1995 39.9% 1926 0.3% 1996 22.7% 1927 28.8% 1997 21.6% 1928 48.2% 1998 39.6% 1929 -17.2% 1999 85.6% 1930 -33.8% 2000 -39.3% 1931 -52.7% 2001 -21.1% 1932 -23.1% 2002 -31.5% 1933 66.7% 2003 ? 1934 4.1% 2004 ? 1935 38.5% 2205 ? 1936 24.8% 2006 ? At any rate back to what is occurring now although the market has held together so far this week you have to be somewhat concerned about the action in the Bonds. It appears the Ten Year Bond (TNX) is about ready to head lower and if it breaks below the 37.75 (point A) level then it could follow a similar path that occurred from mid February into early March when it fell back to around the 35.50 level after breaking out of a Symmetrical Triangle pattern. This action allowed for some selling pressure to develop in the major averages as well, in which the S&P 500 dropped around 60 points (points B to C), so this is something to be on the lookout for in the near term. Keep in mind since making a bottom in early March the S&P 500 has rallied 19% and the Nasdaq around 22% so some type of pullback should be expected before the major averages attempt to make another strong move upward. If the market does begin to pullback some that doesn't mean it's going to unravel. There are several stocks which have been completing the right side of an O'Neil "Cup" pattern over the past few weeks but many of them need to develop a constructive Handle before moving higher. EBAY is an example of a stock which formed the right side of a 1 Year "Cup" from January of 2002 until January of 2003 and then developed a constructive 6 week "Handle" to complete an O'Neil "Cup and Handle" pattern. EBAY then broke out of its Handle in early March, as the market began to rally, accompanied by an increase in volume (point D). This is the type of chart pattern you should be looking for before a stock breaks out.