I strongly believe that the charts often speak themselves,
you
just need to look at them from the right angle and at the right moment
- JB90
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08/16/2001
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Silently losing recovery potential ... |
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Dollar has tumbled and hit a new five-month low on the euro of $0.9170, it also slid against a broad spectrum of European currencies. Stock market indices finished the session all in red. Japanese Nikkei 225 stock market index is approaching its decade lows.
As we stated in our previous commentary high tech sector heavily weighted Nasdaq index is on the crossroads : bulls are waiting good news and recovery in sales, bears are scared by possible and unexpected Fed's rate cut. During this earnings reporting season the only "good news" we heard were :
Wall Street strategists and economists are trying to put a positive spin on every news release. Even if it is quite negative. To avoid confusion we'd better look at the chart of Nasdaq Composite Index. See a picture below. A red triangle pattern developing on the daily chart is very important thing to watch. It supports our market indecision mood hypothesis and if the situation is finally resolved in the near future the market will violently break out in either direction. The key support level is at around 1900. If we dip below this mark, the chances are that we'll test April low this autumn or go even lower. Don't forget that we're approaching a historically worst season (September-October) for high-tech stocks. According to Yale Hirsch study if you'd have invested $10,000 every Jul1-Oct31 in Nasdaq index during 1971-2000 period, you lose $1748. Compare it with $152,646 profits if you've been investing the same sum every Nov1-Feb28 period. Good trading,
Suggested reading :
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| Entire JB90 Archive | |||
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