THE DOT - if this turns orange or red be alert

Tuesday, February 3, 2009

NDX tech outlook medium term

On the left hand we can see the monthly NDX chart up to Jan. The Feb count activated month 8 (green count - set up) and as many cycles have a substantial correction in the 8-9 count zone but mostly after it we have a confirmation of my basic scenario that we will hit the Oct 2002/3 lows before a substantial counter move shall start. The NDX will not make it to the real lows I assume but still is poised to test the 1000 area at least. The most likely date for a turn is mid march as by weekly counts and other indicators we need at least 4 weeks but rather 6 tso complete the sequence or wave 5 of 3. All the bulls need to be wiped out and more negative sentiment should come up as analysts who already made big rvisions from insane levels are far to optimistic for earnings. The majority still expects 76 Dollar for the SPX ( Goldman which is close to my scenario goes for 53 Dollar). First quarter is down 50 % in earnings and that pace will be disturbed a bit by the stimulus program but not by a big deal as most of the aid will not create new demand but rather help people to cut back on older liabilities. Anyway as we could adapt the optimistic version and take a 8 times earnings we still need to go down to 650 SPX to get a decent valuation. Do not listen to this wall street phonies as they proved 3 times in a decade that they have no idea at all. Common sense beats any of those sophisticated models and in order to survive you can not afford to listen to ANY advice and need to make up your own minds by thinking out of the box. Obama is a good salesman but the products he has are still rotten as his team has created parts of the current problems and I doubt the integrity as a normal guy would not even get a job as post boy with the records of Geithner or other stuff members - thats not the team to live up to his promises.

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