The Chart du Jour
Boy -- We have certainly come a long way in a relatively short period of time on the ratio chart above where we divide the Nasdaq Composite by the Dow Jones Industrial Average. The the "new economy" Nasdaq Composite has now almost halved in value vis a vis the "old economy" Dow since the early March high. Who says value investing is dead in this era of tech hype and momentum-oriented day traders? Yes, gravity works and there is a God providing the world with a good dose of sanity.
And yet, if Leonardo Fibonacci were alive, he'd be looking for just a bit more on the downside of this ratio to satisfy the rhythm of the retracement lines drawn above, and then a reversal back up. If R. N. Elliott were alive, he'd be reminding us that extended 5th waves (which this parabolic chart most certainly was), quite often get retraced twice: once down, and then in yet one more failed rally back up. When gold dropped in 1980, it went from $800 to $450 in a pretty fierce drop not dissimilar to current charts of ATT, Lucent, and Apple. But then few may remember that gold did make one last failed run at $725 over a number of months before the true bear set in.
All eyes should be on the lookout for a Nasdaq low of some significance likely next week. On the chart above we've postulated it could come somewhere toward 2450 in an idealized world, which if our ratio chart holds up in Fibonacci fashion, would put the Dow around 10,305 at the same time.
After that, it may be time to cherry pick some fallen tech angels and see how far back up we can go.
Meanwhile, the Dow's reticence to fall to date has been frustrating for bears. A "broadening formation" that is a true tops really should not have dawdled this long. Could the Dow now fall when the Nasdaq goes back up? Or is it now more likely that this whole period of sideways Dow chop (while the Nasdaq's been melting), will end up being a huge 4th wave, before one last hurrah up? We'll take a closer look at that issue when we get there, but the case for a 4th wave continuation pattern before a final spike to the upside may slowly be improving. We continue to find it hard to believe that with really one economy out there, the Nasdaq and Dow indices can move in such disparate absolute directions for much longer.
For immediate web-based access to our latest subscriber-only November 19th analysis, please support Sand Spring Advisors and purchase a quarterly subscription below. Our latest work will be accessible on the final page of the order process. A user-id and password for web access to all past and future articles will follow by e-mail.
How Your Articles Are Delivered
Upon the processing of your credit card or the receipt of a personal check, Sand Spring will e-mail you the articles requested as a Word attachment, and also provide you with a WWW address and password to view the article on the web without using Word should you so desire. Confirmation of your order will be immediate, and the actual article will follow by e-mail typically within a few hours and in all cases before the opening of NYSE trading on the following day.
Ordering by Credit Card:
Our shopping cart is designed for both physical and subscription products, so do not be confused too much when it asks you for a shipping address. A correct address is important only for credit card authorization purposes. Your e-mail information is the most important piece of information to us for proper delivery of your article(s).
Sand Spring Advisors provides information and analysis from sources and using methods it believes reliable, but cannot accept responsibility for any trading losses that may be incurred as a result of our analysis. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities, and should always trade at a position size level well within their financial condition. Principals of Sand Spring Advisors may carry positions in securities or futures discussed, but as a matter of policy will always so disclose this if it is the case, and will specifically not trade in any described security or futures for a period 5 business days prior to or subsequent to a commentary being released on a given security or futures.
If you order by credit card, your credit card will be billed as "Sand Spring Advisors LLC"
Take me back to the Sand Spring Home Page
Comments or Problems
Thank you for visiting Sand Spring Advisors LLC, Inc. We hope to hear from you again soon. For more information on Sand Spring Advisors actual programs, services, or to request a copy of a Disclosure Document, please phone us at 973 829 1962, FAX your request to 973 829 1962, or e-mail us at information@Sandspring.com
10 Jenks Road,
Morristown, NJ 07960
Phone: 973 829 1962
Facsimile: 973 829 1962
Best Experienced with
The material located on this website is also the copyrighted work of Sand Spring Advisors LLC. No party may copy, distribute or prepare derivative works based on this material in any manner without the expressed permission of Sand Spring Advisors LLC
This page and all contents are Copyright © 2000 by Sand Spring Advisors, LLC, Morristown, NJ