The market has just made its first foray below the 20dma (twenty day moving average - a commonly used technical indicator) since the breakout in early March - been below for the last 2 trading sessions - note that all graphs below depict the Nasdaq Composite...
In 2003, the market made its first foray below the 20dma around the same timeframe and stayed there for 3 trading sessions, during which time the market sold down about 2 1/2%. It did not step below the 20dma again till another month had passed...it stayed there for about 2 weeks, in which time the market fell no more than 2% OVER THE ENTIRE PERIOD...it did so again just a week later and stayed there for 3 weeks...the market fell a maximum of 3 1/2 % during this time frame - we then had a six week rally...
In 1995, the market made its first foray below the 20dma 3 months into the rally...and stayed there for 3 trading sessions, during which time the market sold down 1/2% - the market was far less volatile during this time frame...the market then rallied 15% over the next 5 months before falling below the 20dma again...remember, we were far less volatile...a 15% move in under half a year was unheard of at that time...
The question is...are we in 1995, 2003 or 1929/1930? Without a shred of doubt, and buoyed by the 14 new stocks on my radar from Friday's activities...I say we are in 1995...do your diligence...
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