September 24th, 2010
Alert: For those who have been sleeping for the past several months, something exciting is also happening with the NASDAQ Composite Index and stocks in that market (mostly tech).
Some will say “give him a horizontal trendline and everything will look like an inverted H+S to him”. In other words, I might be criticized for stretching the case but another 6% move will bring that index up to the “neckline” making for the tantalizing prospect of a breakthrough and, after some “buyers remorse” congestion, a huge move up.
That’s when things could get really interesting. Crossing that line also represents breaking above a trendline the descends all the way back from the 2000 Tech Bubble peak, thereby signaling a new burst of enthusiasm for tech stocks.
Applying the convention of the neckline being the 50% mark between the trough and the peak, the high for the NASDAQ Composite Index could be 5000 (2500/1250 x 2500), just about back to the Tech Bubble peak in 2000.
I can hear the calls now for my being an “eternal optimist”. True this is total speculation but an enticing one, wouldn’t you say. The move up, should those stocks be able to break across the neckline, could be a dramatic and fast one when one looks at the absence of resistance on the way down in 2000-2001. The more I look at the situation, the more excited I get. Tech could be the place to have your money in 2011-2012.
Lunar Cycle Report: It’s that time of the month again, time to issue the scorecard on the Lunar Cycle for all you loonies:
This is one time I don’t mind being on the losing end of a score. Since the market moved nicely for the past couple of weeks as it barrels ahead to the 1150-1164 hurdle, the Moon’s batting average dropped to 66.7% over the previous 12 months and 67.7% since I started keeping track.
With the way market momentum seems to be expanding (at 1146, it’s excitingly close the hurdle this morning), I’d be disappointed if the next phase to October 7 doesn’t stick to script and end above yesterday’s close of 1124.83.