Johnson & Johnson (JNJ)
JNJ took out a 14-year uptrend (Black Line) last month on its biggest volume ever (Red Arrow)! It has now rallied up to “kiss the line goodbye” (Black Arrow), where it potentially rallies up from below to touch the trendline one last time before imploding. If you own this sucker, then you better have a defensive strategy in place, because Barack may take JNJ to the Phillip Morris extortion mill.
Microsoft (MSFT)
$20.68 is the key level for Microsoft. It is the 62% retracement level from the 1994 low to the 2000 high. It has tagged this line on several occasions over the 8 years of its current Bear Market. You can see how much volume has traded in this range (Green Arrows). If Microsoft takes out $20 on volume, then you need to be very concerned if you hold it, because at that point single digits become a very real possibility in a short period of time. Man, what would that do the NASDAQ, the Dow and the S&P 500?
The Nikki
Here is a chart of the Nikki over the last 28 years. Is it just me, or does this chart looks a whole lot like the chart of Microsoft?
If you hold Microsoft, then you should sear this chart into your brain, because you may look back in 10 years and realize that your money was sitting idol for a decade and you had a historical precedent to get out of it on the next retest of the highs of a potential 20-year trading range.
The Semiconductor Index ($SOX)
Most all the major semiconductor charts look like this (Applied Materials, Intel, Texas Instruments). I’m just gonna guess that one of these support levels will hold. So I am going to be on high alert for any further weakness in semiconductorland. I would love to get AMAT in the signal digits! I just might have to wait for $6, so I will be careful not to pull the trigger too early if it falls quickly to $8.
The Dow Jones Industrial Average
The Dow crashed in September and October on gigantic volume (Red Arrows). You know the drill. That is institutional investors running for the hills. The fact that they didn’t buy last month’s bounce with any conviction tells me that they are probably waiting for lower prices before they commit more money. The obvious target is the 1998 and 2002/2003 lows in the 7200 range.
That massive volume in the 10,000 – 11,300 range will take a long time to work through (Green Lines and Green Arrows)
Just some food for thought, but a break of 7,200 sets up a test of the trendline from the 1930 bottom at around 5,000. If 5,000 is tested in the near term, then I am here to tell you that it will probably turn out to be one of those once-in-a-lifetime entry points, and will most likely form THE low for the Secular Bear Market, which I expect to run from 2000 – 2016/2018. Keep that in the back of your mind. You should be licking your chops for that opportunity!
So the long term charts aren’t real compelling. Any more concerted selling will set up a test of long term support lines and should lines hold, then we may get a decent rally for what could be 6 months or could be 24 months. You’d better have a professional with a buying and selling discipline to guide you through it, because if you are left to your own devices, then you may end up trading on emotions.
By the way, the definition of an equilibrium between sellers and buyers is when buyers show up to defend a trendline. The only way those trendlines hold up for real is if big money shows up to buy stocks and take them home for an extended period of time.
It should be an interesting end of the year.
JNJ took out a 14-year uptrend (Black Line) last month on its biggest volume ever (Red Arrow)! It has now rallied up to “kiss the line goodbye” (Black Arrow), where it potentially rallies up from below to touch the trendline one last time before imploding. If you own this sucker, then you better have a defensive strategy in place, because Barack may take JNJ to the Phillip Morris extortion mill.
Microsoft (MSFT)
$20.68 is the key level for Microsoft. It is the 62% retracement level from the 1994 low to the 2000 high. It has tagged this line on several occasions over the 8 years of its current Bear Market. You can see how much volume has traded in this range (Green Arrows). If Microsoft takes out $20 on volume, then you need to be very concerned if you hold it, because at that point single digits become a very real possibility in a short period of time. Man, what would that do the NASDAQ, the Dow and the S&P 500?
The Nikki
Here is a chart of the Nikki over the last 28 years. Is it just me, or does this chart looks a whole lot like the chart of Microsoft?
If you hold Microsoft, then you should sear this chart into your brain, because you may look back in 10 years and realize that your money was sitting idol for a decade and you had a historical precedent to get out of it on the next retest of the highs of a potential 20-year trading range.
The Semiconductor Index ($SOX)
Most all the major semiconductor charts look like this (Applied Materials, Intel, Texas Instruments). I’m just gonna guess that one of these support levels will hold. So I am going to be on high alert for any further weakness in semiconductorland. I would love to get AMAT in the signal digits! I just might have to wait for $6, so I will be careful not to pull the trigger too early if it falls quickly to $8.
The Dow Jones Industrial Average
The Dow crashed in September and October on gigantic volume (Red Arrows). You know the drill. That is institutional investors running for the hills. The fact that they didn’t buy last month’s bounce with any conviction tells me that they are probably waiting for lower prices before they commit more money. The obvious target is the 1998 and 2002/2003 lows in the 7200 range.
That massive volume in the 10,000 – 11,300 range will take a long time to work through (Green Lines and Green Arrows)
Just some food for thought, but a break of 7,200 sets up a test of the trendline from the 1930 bottom at around 5,000. If 5,000 is tested in the near term, then I am here to tell you that it will probably turn out to be one of those once-in-a-lifetime entry points, and will most likely form THE low for the Secular Bear Market, which I expect to run from 2000 – 2016/2018. Keep that in the back of your mind. You should be licking your chops for that opportunity!
So the long term charts aren’t real compelling. Any more concerted selling will set up a test of long term support lines and should lines hold, then we may get a decent rally for what could be 6 months or could be 24 months. You’d better have a professional with a buying and selling discipline to guide you through it, because if you are left to your own devices, then you may end up trading on emotions.
By the way, the definition of an equilibrium between sellers and buyers is when buyers show up to defend a trendline. The only way those trendlines hold up for real is if big money shows up to buy stocks and take them home for an extended period of time.
It should be an interesting end of the year.
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