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From: "Stan Book" <sbook@xxxxxxxxxxx>
> The question is whether the long term up trend can halt the shorter term
> down draft.
>
Excellent question! If you look at the monthly chart going back to 1971
(courtesy of TradeStation Pro) the biggest decline in terms of time was from
Jan 73 to Oct 74 - 21 months. July 2001 is month # 16 from the top in Mar
2000. The price from the top in Jan 73 to the bottom in Oct 74 NASDAQ
declined to 41.45% of the the value at the top (from 132.35 to 54.87). From
the top in Mar 2000 to the bottom in Apr 2001 market declined to 31.56%
(from 5132.52 to 1619.58).
There is a long term trendline going from the bottom on Oct 74 through the
bottom on Oct 90 that coincide with 200 month moving avarage. It is about
1082 as of this months (of course, it moves up every month).
So, back to original question: did NASDAQ had enogh? In terms of time we
still have five more months to go down before the start of a "new era". In
terms of price decline we are in the "new era" already (the current decline
set up a record). If you are a believer in the trendlines and averages there
is a room to go down more.
Fundamentally rate cuts and tax rebates are not inducing for the market
declines. Monthly price chart did not offer any "prove" that decline is
over. Now what is next?
Blessed are day traders...
Unblessed Alex.
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