Thursday May 12, 2022
he NASD is falling as fast as it rose las year. Let's see if 2000-2002 offers an explanatory map.
NASD 2000-2002
The nidex shot form Fall 1999 at 2500 to double at 5
000by March 2000.. It then collapsed to near 3000. A bounce, wave 2 ensued, back to 4250. That wave 2 was a near perfect .618 retracement of the entire fall. No doubt this brought a mistaken sigh of relief but like 1930, it did not last. It took more than two years to find a bottom at 1250 in Fall 2002. that would be Farrell's rule two excesses in onoe direcxoin will lead to an opposite excess in the other direction.The index lost 75% of its March 2000 value. 1250 was the 200 month moving average. That is Bob Farrell's rule 1, markets tend to return to the mean over time.
It did recover into 2007 but only to 2750. It thenm returned to 1250 by march 2009.
NASD 2000-2009
This is somewhat like the period from 1972-1982. The DJIA peaked in January 1972 around 1,040. It did a slow crash into Dec 1974 at 577. By 1982 it had only recovered to around 750-800. I expect a similar future at this point. The air pocket drops, the crypto mania mirrors dot.com 200-2002 and then sub prime 2007-2009. Pandemic stocks like Peloton already look like zomobie stocks headed for bankruptcy.
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