Friday, May 05, 2006
Here is a weekly bar chart of the Nasdaq Composite index. I last commented on this chart here.
You can see that for the past two years the reactions against the uptrend have grown progressively shorter and shallower. The terminal points of these reactions have formed a sequence of higher highs. These facts tell me that the index is still in a strong uptrend. I think we will see upside acceleration after the past 6 months of backing and filling. My upside target is still 2550 but I think there is a 1 in 3 chance that the market will move to 2900 before a drop of 30% or so begins.