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In a message dated 5/26/00 6:51:34 AM Pacific Daylight Time, staylor@xxxxxxx
writes:
> Not doubting that it's there, but I am having to squint hard to see a H&S
> on the daily NAS
Yeah, it's got a very pointy head (remember "Cone Heads," on Saturday Night
Live?), it looks a little fuzzy to me too.
FWIW, in the NDX there is a (nearly) two year trendline cutting through near
3000 and so far it's holding on a daily close basis. Moreover, "predicting" a
bear market after a nearly 38% decline (4816 - 38% is +/- 2976) is a bit like
being a weather man, walking outside at 11AM (getting wet), and then
forecasting a 62% chance of rain.
I can hear someone out there saying you are not supposed to calculate Fibos
from zero, but there is a historical precedent: the DJI print high in 1987
was 2722, and a 38% decline would have been near 1682. There is some argument
as to the actual lows on the 1987 crash (1707 print, 1616 theoretical), but
it was close to 38%. Oh yeah, and that was a bit less than two months after
the August 1987 peak (NDX peak this year was 3-24 intraday, 3-27-2000 closing
basis ;-).
I am not saying this the low! I truly do not know yet. I'm just offering
some facts. I agree this is a critical area, and that it is wise to let the
market tip its hand. Even a bear market bounce could produce a 1000 point
rally (62% of this decline is near NDX 4100).
Bill Wynne
SmartTrades.com
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