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Mix-Ansicht- NASDAQ Einschätzung - ANDI, 24.04.2000, 23:10
- Re: NASDAQ Einschätzung - JüKü, 24.04.2000, 23:36
NASDAQ Einschätzung
von Steven Williams
(04/18/2000 PM): Nasdaq COMP: On a closing basis, the COMP has had a loss of -34% from its all time high on 3/10/2000 of 5048.62 (close only) to the low Friday 4/14/2000 of 3321.29 (close only). I am using the closing price because I wanted to compare directly with the Nikkei 1990 chart. The COMP from intra-day highs to lows suffered an overall loss of -37%. The Nikkei topped on 12/29/1989 at 38916 (close only) and the first major wave down was a loss of -28% to the low on 4/2/1990 of 28002 (close only). The Nikkei took 3 months to drop this far, but the COMP managed a similar feat in only 25 trading sessions or 5 weeks (26 session using intra-day highs/lows). If we are not already rebounding from the same location as the (red)"A" in the Nikkei chart then we are very close. In the COMP, I count 5 complete waves down for the"A" wave (allowing a tiny overlap of waves 1 and 4). If this is really completed, then the"B" wave should retrace perhaps 50%, to 4185 intra-day high and close. Since the Nasdaq COMP compressed its mini-crash into only 5 weeks, similar time ratios for"B" and"C" waves would be 3 weeks and 6 weeks, respectively. This is roughly"B": 1st week of May, 2000 and"C": mid-June, 2000. At the base of the (red) C and (blue) A wave, the Nikkei had dropped -48%. The Nikkei"C" wave was slightly longer than the"A" wave (ratio 1.2:1). If the COMP follows a similar pattern of"C = A", and"B" is 50% retracement, then"C" would bottom around 2280. If C to A ratio is same as Nikkei (1.2:1), then COMP 1900 is the anticipated low (by mid-June).
After a full 10 years, The Nikkei is still less than 50% of its previous mania-induced high of 38916. Yesterday, the Nikkei closed at 18970.
When looking at the Nikkei chart or the US 1929 Crash chart, there were several instances where a very sharp selloff was immediately followed by a very sharp rally attempt. Only a few of these rallies eventually amounted to anything. In most cases, stock prices continued to fall.
Now let's take a brief comparison of the COMP vs the US 1929 Crash chart. In 1929, the first major wave down took 23 trading days and fell -17%. The COMP has fallen -37% in 25 trading days. In 1929 the DJIA rallied (sharply on the first retracement day) for 5 trading days beginning on a Monday and retraced 58%. If the COMP follows a similar pattern and timeframe, then the retracement should peak next Monday (4/22) or Tuesday (4/23) at around 4330 (intra-day high). The 3rd wave down in 1929 was the real crash wave which was longer than wave"1" by a ratio of 2.5:1. This same ratio cannot also occur for the COMP -- I don't care how bearish you are, the COMP index is not going to go negative! Even a ratio of 1.618:1 is highly unlikely. If the retracement carries back to 4330, then the wave 3 to wave 1 ratio of 1.618:1 would project a low of 1250 (intra-day low). While I anticipate an ultimate COMP low to be lower than the 1998 low of 1357, I do not expect the final low to occur for a few years.
If we take a more conservative approach and assume that"C = A" then a COMP low of 2425 is appropriate.
The timing of the crash low for 1929 was 5 weeks after the end of wave"1" (5 trading days retracement, 21 trading days crashing). If the COMP follows a similar path, then 1 week for the retracement rally and 4 weeks for the crash wave targets the week of May 22-29, 2000.
Summary: The Nikkei and 1929 charts have given us a retracement target of 4185 to 4330, and a crash low of 2285 to 2425.
The COMP volume yesterday was 2.5 billion. Even for the COMP that's very high volume, but the breadth was rather weak as the small handfull of powerhouse stocks stole most of the rally energy.
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