Tuesday
May172011
Nasdaq Deja Vu
Tuesday, May 17, 2011 at 12:15PM With the Nasdaq once again running into headwinds, many investors are getting an uncomfortable sense of deja vu. Since the Nasdaq peaked back in 2000, the index is now making its third attempt to break above 2,900. If the outcome of the last two attempts (declines of more than 50%) is any indication, it is not going to be a pretty Summer for Technology stocks. The bulls, however, are hoping that the third time is the charm.
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Reader Comments (1)
To gain more insight into what may be about to happen in the tech part of the market, we need to look at price crossing the 10-12 month simple moving average of $COMP during this same period of the chart shown above with the resistance line. Also include RSI, W%R and %B to help screen out false moves or "head fakes". Better to go back 14 or 15 years and examine the resulting charts. I might play around with some other indicators like MACD to see if they were useful in the 00-01 and 07-08 melt downs. If I can chart this example and include it, I will. If not do it yourself in StockCharts or other and study the results. Also plot $SPX and $INDU. To amaze yourself, plot $GOLD over the same periods. Look at the upward glide path since 00.
http://stockcharts.com/c-sc/sc?s=$COMPQ&p=M&yr=15&mn=0&dy=0&i=p60655735870&a=236344197&r=2461