Let's take another look at that 2000 chart. On the first leg down we dropped 13% in just 5 days and in another three weeks the Nasdaq had lost almost 30% from the high. So far in 2007 on this leg down we have lost 8.5% in the first 13 candles from top to bottom or 2 1/2 wks. We did retrace 58% of the initial buying/short-covering panic of only 3 days.
Now one thing we can expect in confirming a downtrend is not many up days, but if we look at the 2000 example, on the first sharp drop there was a secondary high made there that was only 1% or 53pts from the 5132 high.The next leg down was a full 1429 pts or 28%, so double the first leg plus.
http://bigcharts.mar...&mocktick=1.gif
I guess what we could expect using this as a model is something like 16% off the last high of 2627, if that was the B point... or 446 pts, taking us to 2181. now in 2000 that only took 7 days... that double the interval drop.
Perhaps in hindsight now, looking at the craziness we've experienced over the past few weeks, we get a perspective on the losses from 2000 vs 2007. In other words we may not have seen anything yet, if this is the big one, and today's losses pale in comparison to 2000. Hey, that's only for the Nasd0g which is struggling to maintain a .50 retracement of the all time high though, since the DJIA and SPX are at new highs there is plenty of room for shock and awe in those indices. Now, looking at time, the time interval was also double in 2000, so maybe what we'll see happen is a more gradual drop like a few weeks to a month to put us down under 2200, but the first sign that something else is operative will be one of two criteria... #1- a new high over 2627 ... #2- 5 green candles or up days in succession. Otherwise, stay with the trend... the trend is your friend.
Edited by SemiBizz, 12 August 2007 - 12:33 PM.
