The Chart du Jour

A Broken Bubble - with Upward Spikes

January 5, 2001

By, Barclay T. Leib


Chart produced using Advanced GET End-of-Day

We have previously trotted out the above chart comparison between the 1989 Nikkei collapse and the 2000 Nasdaq collapse, but as we start 2001, we thought it worth another look. The collapse from Dec 1989 onward in the Nikkei eventually transpired in a 5-wave down style, but not before waves 1 and 4 came very close to overlapping.

If the same were to now transpire in the Nasdaq, a period of gestation should eventually yield to an assault on 3,000, but not much further. Maybe that does not seem like a huge rally, but in percentage terms it is close to 20% from current levels. It will be a sucker rally, yes, but a substantive rally nonetheless. Bears take shelter. Our day will come again, but not right now.

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