Post by TradingForGod on Sept 2, 2004 9:14:00 GMT -5
The Nasdaq was unable to break above the 40-day MA on the last rally and backed off a bit Monday and early Tuesday. The 30-minute chart (meaning that each bar represents 30 minutes of trading action) below shows that the correction lower was a nice, even a-b-c patterm where the "a" wave early Monday and the "c" wave early Tuesday were about equal in length. See "The Basics" series for more discussion about Elliott Wave patterns. The sell-off went right to the 38% (Fibonacci) retracement of the recent rally. The low was 1820 while the retracement target was 1822. That's pretty close! From there, equities pushed sharply higher and the Nasdaq is once again banging its head into the declining 40-day MA, now at 1853. Yesterday's close at 1850 was very close.
Just about any additional strength today should be enough to push the Nasdaq back to last week's high at 1866. Breaking above there opens the way for another rally that should be about the same length as the rally we just had. That puts the target just under 1935 which is right at the 62% retracement of the sell off that began on July 1st. That's as high as this rally should go IF it is corrective. A move above there is bullish.
Okay that's the upside. What about the downside. Well, obviously the 40-day MA has been working as decent resistance here. In addition, as pointed out last time 1867 is also the 38% retracement of the July sell-off. So practically speaking, the Nasdaq has not broken any significant resistance on this rally yet. The S&P and Dow are in better shape, but even they are not really in the "bull camp" yet. If prices stall out right here and begin to fall back, it is critical that the Nasdaq stay above 1795 now. If this support, the 62% retracement of the recent rally, fails it probably means that this rally WAS corrective and that it is OVER. Watch out for that.
FUN FACT OF THE DAY(from the Stock Traders Almanac
In presidential election years, the direction of the equity market between the national party conventions and the election is an excellent indicator of which party will win. Since 1900, the incumbent party has won 16 presidential elections. In 14 of those contests the stock market was up an average of almost 9% between the conventions and election day. Only two incumbents won when the stock market was down, Dwight Eisenhower in 1956 and Ronald Reagan in 1984. On the other hand, the incumbent party has lost the election 10 times since 1900, and in seven of those elections the stock market was down heading into election day. One of the up years doesn't really count, because that was 1932 when the Great Depression was in full force, and FDR was going to win no matter what. So watch the equity markets over the next two months, and you'll have a great idea who is going to win in November.
THOUGHT FOR THE DAY (from Luke 24:13-27):
Now that same day two of them were going to a village called Emmaus, about seven miles from Jerusalem. They were talking with each other about everything that had happened. As they talked and discussed these things with each other, Jesus himself came up and walked along with them; but they were kept from recognizing him. He asked them, "What are you discussing together as you walk along?" They stood still, their faces downcast. One of them, named Cleopas, asked him, "Are you only a visitor to Jerusalem and do not know the things that have happened there in these days?" "What things?" he asked. "About Jesus of Nazareth," they replied. "He was a prophet, powerful in word and deed before God and all the people. The chief priests and our rulers handed him over to be sentenced to death, and they crucified him; but we had hoped that he was the one who was going to redeem Israel. And what is more, it is the third day since all this took place. In addition, some of our women amazed us. They went to the tomb early this morning but didn't find his body. They came and told us that they had seen a vision of angels, who said he was alive. Then some of our companions went to the tomb and found it just as the women had said, but him they did not see." He said to them, "How foolish you are, and how slow of heart to believe all that the prophets have spoken! Did not the Christ have to suffer these things and then enter his glory?" And beginning with Moses and all the Prophets, he explained to them what was said in all the Scriptures concerning himself. (NIV)
These two followers of Jesus were headed to Emmaus after Jesus' crucifixion. They were disllusioned. The text says their faces were downcast. Why? Because they had LOST HOPE. They had "hope that he (Jesus) was the one who was going to redeem Israel", but he had been killed before their eyes. Their master was dead. The movement was crushed. There was...no hope.
But there was Jesus. Right there with them. Right beside them. They didn't recognize him. Why? Because they had lost hope. They were "slow of heart to believe all that the prophets had spoken." But that didn't mean that Jesus wasn't there. They just couldn't SEE him there.
Sometimes life deals us a tough blow. Who among us HASN'T had a tough blow. In my case, I have had to come to grips with the fact that my idea of "Trading for God" is not going to work out, at least not the way I had envisioned it. I tried for a long time. I prayed and prayed. Why Lord? Why have you called me out to this "ministry" only to have it collapse around my head? Why Lord did you ask for a leap of faith only to let me fall to the canyon floor below. WHERE ARE YOU GOD? These are the difficult questions that I have wrestled with over the past year. I'm sure each of you have your own.
In the midst of this trial, I must confess, I LOST HOPE. And as a result, I lost sight of God. I knew he was there. I just couldn't see him. And because I couldn't see him, I got scared. I was like Peter when he looked at the waves around him and began to sink into the water. If he, if I, had only kept looking at Jesus. But praise His name, he was walking with me the entire time and my eyes have once again been opened. I still don't understand what his plan is. I still don't know why things have happened the way they have. But I do know this...Jesus is on the road with me.
He is faithful, even in the midst of our trials. He does have a plan, even if we are "slow of heart" to believe it. He is walking with each of us every day. My prayer for each of us is that God will richly bless us in a way that is real and tangible to us. But MORE THAN THAT, my prayer is that we will continue to have faith, continue to hope, even when things don't go our way. Jesus is there on the road with us then too.
God's Blessings,
TFG
Just about any additional strength today should be enough to push the Nasdaq back to last week's high at 1866. Breaking above there opens the way for another rally that should be about the same length as the rally we just had. That puts the target just under 1935 which is right at the 62% retracement of the sell off that began on July 1st. That's as high as this rally should go IF it is corrective. A move above there is bullish.
Okay that's the upside. What about the downside. Well, obviously the 40-day MA has been working as decent resistance here. In addition, as pointed out last time 1867 is also the 38% retracement of the July sell-off. So practically speaking, the Nasdaq has not broken any significant resistance on this rally yet. The S&P and Dow are in better shape, but even they are not really in the "bull camp" yet. If prices stall out right here and begin to fall back, it is critical that the Nasdaq stay above 1795 now. If this support, the 62% retracement of the recent rally, fails it probably means that this rally WAS corrective and that it is OVER. Watch out for that.
FUN FACT OF THE DAY(from the Stock Traders Almanac
In presidential election years, the direction of the equity market between the national party conventions and the election is an excellent indicator of which party will win. Since 1900, the incumbent party has won 16 presidential elections. In 14 of those contests the stock market was up an average of almost 9% between the conventions and election day. Only two incumbents won when the stock market was down, Dwight Eisenhower in 1956 and Ronald Reagan in 1984. On the other hand, the incumbent party has lost the election 10 times since 1900, and in seven of those elections the stock market was down heading into election day. One of the up years doesn't really count, because that was 1932 when the Great Depression was in full force, and FDR was going to win no matter what. So watch the equity markets over the next two months, and you'll have a great idea who is going to win in November.
THOUGHT FOR THE DAY (from Luke 24:13-27):
Now that same day two of them were going to a village called Emmaus, about seven miles from Jerusalem. They were talking with each other about everything that had happened. As they talked and discussed these things with each other, Jesus himself came up and walked along with them; but they were kept from recognizing him. He asked them, "What are you discussing together as you walk along?" They stood still, their faces downcast. One of them, named Cleopas, asked him, "Are you only a visitor to Jerusalem and do not know the things that have happened there in these days?" "What things?" he asked. "About Jesus of Nazareth," they replied. "He was a prophet, powerful in word and deed before God and all the people. The chief priests and our rulers handed him over to be sentenced to death, and they crucified him; but we had hoped that he was the one who was going to redeem Israel. And what is more, it is the third day since all this took place. In addition, some of our women amazed us. They went to the tomb early this morning but didn't find his body. They came and told us that they had seen a vision of angels, who said he was alive. Then some of our companions went to the tomb and found it just as the women had said, but him they did not see." He said to them, "How foolish you are, and how slow of heart to believe all that the prophets have spoken! Did not the Christ have to suffer these things and then enter his glory?" And beginning with Moses and all the Prophets, he explained to them what was said in all the Scriptures concerning himself. (NIV)
These two followers of Jesus were headed to Emmaus after Jesus' crucifixion. They were disllusioned. The text says their faces were downcast. Why? Because they had LOST HOPE. They had "hope that he (Jesus) was the one who was going to redeem Israel", but he had been killed before their eyes. Their master was dead. The movement was crushed. There was...no hope.
But there was Jesus. Right there with them. Right beside them. They didn't recognize him. Why? Because they had lost hope. They were "slow of heart to believe all that the prophets had spoken." But that didn't mean that Jesus wasn't there. They just couldn't SEE him there.
Sometimes life deals us a tough blow. Who among us HASN'T had a tough blow. In my case, I have had to come to grips with the fact that my idea of "Trading for God" is not going to work out, at least not the way I had envisioned it. I tried for a long time. I prayed and prayed. Why Lord? Why have you called me out to this "ministry" only to have it collapse around my head? Why Lord did you ask for a leap of faith only to let me fall to the canyon floor below. WHERE ARE YOU GOD? These are the difficult questions that I have wrestled with over the past year. I'm sure each of you have your own.
In the midst of this trial, I must confess, I LOST HOPE. And as a result, I lost sight of God. I knew he was there. I just couldn't see him. And because I couldn't see him, I got scared. I was like Peter when he looked at the waves around him and began to sink into the water. If he, if I, had only kept looking at Jesus. But praise His name, he was walking with me the entire time and my eyes have once again been opened. I still don't understand what his plan is. I still don't know why things have happened the way they have. But I do know this...Jesus is on the road with me.
He is faithful, even in the midst of our trials. He does have a plan, even if we are "slow of heart" to believe it. He is walking with each of us every day. My prayer for each of us is that God will richly bless us in a way that is real and tangible to us. But MORE THAN THAT, my prayer is that we will continue to have faith, continue to hope, even when things don't go our way. Jesus is there on the road with us then too.
God's Blessings,
TFG
