"Kirk, it appears you're suggesting the SOX will visit the 250 area for a double bottom while the COMP will take quite a dump down the road."
Anything is possible but that is not what I am predicting.
Many are predicting a 2006 bottom similar to the 1998 and 2002 bottoms. This sort of bottom would fit the charts I've shown, but you can see from the charts the overall trend is still up hence they also support much higher levels. As such, I think we still rely on economic fundamentals. Those are now starting to bottom and turn up again, according to preliminary indicators I have. If it is apparent the economy is in good shape in a few months, then I suspect the market should already be confirming this now by ending the current correction as a higher low compared to the August 2004 lows.
This chart supports that idea:
That chart clearly shows we are now testing the breakout of the 2004 consolidation, from above.
I am not worried about a major new low unless the middle tine support of the blue pitchfork is FIRST broken. Until then, I think is would just be normal corrections to work off oversold conditions.
IF the economy is healthy, we could see some higher highs made where a "major 2006 low on the 4 year off presidential election year cycle" could be a "major low" that is significantly higher than today's levels... if the market rallies to the upper tine resistance levels. That is what I think is probably going to happen. It COULD happen off a double top at 1550.... as I think many would want to get out if the market returned to past highs so that would give a nice correction or even a cyclical bear.
I remember it took 7 years after the 1987 bear market before some of my tech stocks made new highs that they held for good. This would fit a 2006 bottom and a rally in 2007 or 2008 to new highs that hold.
Anything is possible but that is not what I am predicting.
Many are predicting a 2006 bottom similar to the 1998 and 2002 bottoms. This sort of bottom would fit the charts I've shown, but you can see from the charts the overall trend is still up hence they also support much higher levels. As such, I think we still rely on economic fundamentals. Those are now starting to bottom and turn up again, according to preliminary indicators I have. If it is apparent the economy is in good shape in a few months, then I suspect the market should already be confirming this now by ending the current correction as a higher low compared to the August 2004 lows.
This chart supports that idea:
That chart clearly shows we are now testing the breakout of the 2004 consolidation, from above.
I am not worried about a major new low unless the middle tine support of the blue pitchfork is FIRST broken. Until then, I think is would just be normal corrections to work off oversold conditions.
IF the economy is healthy, we could see some higher highs made where a "major 2006 low on the 4 year off presidential election year cycle" could be a "major low" that is significantly higher than today's levels... if the market rallies to the upper tine resistance levels. That is what I think is probably going to happen. It COULD happen off a double top at 1550.... as I think many would want to get out if the market returned to past highs so that would give a nice correction or even a cyclical bear.
I remember it took 7 years after the 1987 bear market before some of my tech stocks made new highs that they held for good. This would fit a 2006 bottom and a rally in 2007 or 2008 to new highs that hold.
Kirk out
#board-1574
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