Tonight I’m Gonna Party Like It’s October 29, 1999

With the Gore election matter expected to be resolved
after the market closes, the market is itching to react in some meaningful way.

If you are a chart aficionado, you might even guess that the reaction we will
see Monday is poised to be big…really big. Problem is, nobody really knows
what the direction will be (even though some may claim otherwise).

This weekly chart of the Naz
(
$COMPX |
Quote |
Chart |
News |
PowerRating)
tells the story.

The Naz is at a very crucial juncture. We’re at the same level
we were at just before the breakout on October 29, 1999, which ushered in the new
era of irrational exuberance. Notice how the market bounced with a range for
four months before it made that breakout. It’s hard to imagine that the Nasdaq
will bust up through this level all that easily. This is especially the case
when you consider that the market is already up over 10% since Tuesday. Could it
be that a favorable Bush ruling is already worked into the market?

Whatever the case, you have to look at the possibility for some
sloshing around in this range for awhile if we have a pullback from here.
Conversely, a breakout above this level may inject some of that ole irrational
exuberance into the market again.

Have a great weekend,

Eddie

P.S. It was great meeting and chatting with a number of you at
our seminar at the Irvine Hilton last night!