Still Hanging

  • March 2, 2001
  • Eddie Kwong

There will be ample talk
this weekend that the market is well on the way to hell in a hand
basket. Yes, it very well could be, but it doesn’t yet reach the hell zone until
it crosses certain lines drawn in the sand. So you can listen and be influenced.
Or you can be a trader. Hey — don’t even let me influence you.

Here we go. 

For the second consecutive week, the S&P 500
closed right at its 1999 lows and its 50% retracement between the 1998 lows and
March 2000 highs.

Now…turn your attention to the weekly chart of
the Nasdaq. The Nasdaq Composite hit the lows of a trend channel. Note that the
validity of this lower trendline is strengthened by the fact its upper trendline
proved to be potent resistance, as I suggested it might be in my January
25, 2001, “Chart of the Day.“

So, chart-wise, by these two
measures we remain at an critical juncture. We have not yet broken below it. All
is not lost.

We can bounce.

Have a joyful weekend,

Eddie