Sand Spring Advisors LLC
Big Bear, Little Bear
December 10, 2001
by, Barclay T. Leib
A few days ago we warned that for an immediate bearish interpretation to stay intact, the Dow Jones needed to quickly retreat back below 10,000, and under no circumstances should start to trade above 10,205. Albeit the Dow did create an overlap where it should not have up at 10,120, it has at least cooperated and traded straight back off.
Longer term, this still leaves multiple Elliott wave counts open for the major indices. Some may argue that everything post the 1998 S&P & Dow high is some sort of irregular 4th wave, with new all-time highs to still follow in these indices with time. Others may see the current NASDAQ 100 and NaSDAQ Composite indices simply to be within a 4th wave of yet to be complete impulsive 5-wave decline.
For the moment, it is is not worth the effort to try to read too much into any single wave count. Unfortunately too many cross-currents and cross-possibilities exist at the present time, with the 10,120 overlap on the Dow (and similar overlap in the S&P) only serving to complicate matters.
What we do see is a strong probability of a "little bear" move down to the 38.2% retracement level on the daily March NASDAQ 100 futures. 1495 would also fall close to 200-day moving average support here.
Then we shall have to see from there whether a "big bear" move is still in the cards as well -- and if so, how immediate it could be. We do have a proclivity toward the longer-term NASDAQ Composite wave count shown below that would eventually lead this index to just above 1100. It's just that we don't expect such a move to transpire without much pushing and pulling first in the months to come.
Lastly, one note where immediacy does look important. Within the tech sector, the Echostar (DISH) chart pattern certainly looks ripe for a 5th-wave tumble. Stops above $27 would seem to make sense, with a take-profit target on shorts just below $18. We've even posted our sparingly-used bear mascot under the chart for good luck and inspiration.
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