AI
Saturday, December 07, 2002 2:02:04 AM
Zeev and the board:
A friend asked if I would pass this along, and solicit comments.
==============
The first chart is a comparison of the 5/2000 and 10/2002 rallies for the Nasdaq. This chart compares the 5/2000 rally (on the left) to the current 10/2002 rally (on the right).
Notice the similarities between the price pattern, the MACD, and daily Stochastics.
The 5/2000 rally peaked 37 days after it started, which is where the current rally has peaked so far.
Whether we have seen the top for the Nasdaq today or not, it still remains to be seen, but IMO the
major top is in.
Notice that the 5/2000 rally gave back 61.6% of the gains from the peak in 14 days, from
the 4289 high to the 3521 low (Wave B) before bouncing but failing to put in a higher
high (wave C).
A 61.8% fib retrace of the gains from the current rally gives us a pullback target of 1266 for the Nasdaq.
If history repeats, that target should be met on the 14th trading day from the peak, possibly marking a
short-term bottom, on December 19th, which is Thursday the day before options expire.
So far the scenario remains valid.
The second chart is a Nasdaq 10-day chart.
It shows more upside to complete wave C of what may develop into an ABC corrective 3-3-5 expanded flat pattern. It is projected to top at around late Monday or Tuesday morning to complete Wave '2'. Target high is in the 1460/1465 area for a 50% retrace of the decline from the 1521 high. An alternate scenario (not shown in chart) is that Monday opens down and continues down, which makes the wed-fri corrective pattern a completed running flat -
From there, begins Wave '3' down which may last until the end of next week. Expected drop of another 110++ points for a target in the 1320-1360 range, then a Wave4 bounce correction that should take us back up to max pain levels and go sideways for 2-3 days or so during OE week, followed by a day or 2 to finish off Wave5 by Dec 19th at a short-term low of 1260/1280 (61.8% retrace).
If this scenario plays out, max pain may adjust downwards if next week turns out to be a slaughter. According to iqAuto, MP for QQQ is close between 25 and 26.
From there a Santa rally until the end of the year, and then stocks tank again for months and make new all time lows starting 1/2003.
=========
Any comments on either set of charts would be appreciated. I posted the same thing on LG's thread. TIA
A friend asked if I would pass this along, and solicit comments.
==============
The first chart is a comparison of the 5/2000 and 10/2002 rallies for the Nasdaq. This chart compares the 5/2000 rally (on the left) to the current 10/2002 rally (on the right).
Notice the similarities between the price pattern, the MACD, and daily Stochastics.
The 5/2000 rally peaked 37 days after it started, which is where the current rally has peaked so far.
Whether we have seen the top for the Nasdaq today or not, it still remains to be seen, but IMO the
major top is in.
Notice that the 5/2000 rally gave back 61.6% of the gains from the peak in 14 days, from
the 4289 high to the 3521 low (Wave B) before bouncing but failing to put in a higher
high (wave C).
A 61.8% fib retrace of the gains from the current rally gives us a pullback target of 1266 for the Nasdaq.
If history repeats, that target should be met on the 14th trading day from the peak, possibly marking a
short-term bottom, on December 19th, which is Thursday the day before options expire.
So far the scenario remains valid.
The second chart is a Nasdaq 10-day chart.
It shows more upside to complete wave C of what may develop into an ABC corrective 3-3-5 expanded flat pattern. It is projected to top at around late Monday or Tuesday morning to complete Wave '2'. Target high is in the 1460/1465 area for a 50% retrace of the decline from the 1521 high. An alternate scenario (not shown in chart) is that Monday opens down and continues down, which makes the wed-fri corrective pattern a completed running flat -
From there, begins Wave '3' down which may last until the end of next week. Expected drop of another 110++ points for a target in the 1320-1360 range, then a Wave4 bounce correction that should take us back up to max pain levels and go sideways for 2-3 days or so during OE week, followed by a day or 2 to finish off Wave5 by Dec 19th at a short-term low of 1260/1280 (61.8% retrace).
If this scenario plays out, max pain may adjust downwards if next week turns out to be a slaughter. According to iqAuto, MP for QQQ is close between 25 and 26.
From there a Santa rally until the end of the year, and then stocks tank again for months and make new all time lows starting 1/2003.
=========
Any comments on either set of charts would be appreciated. I posted the same thing on LG's thread. TIA
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