Thursday, February 07, 2002
The Point of Balance
We are at a Crossroads: the most important actio:reactio point of balance, the 50% price point of the September Rally. So many clues pointing here.
There is a significant COMPQ gap at 1746:1786. This is also the 50% fib of September rally at 1743.
The 1746:1786 gap was "the" measured gap move of the rally. Mentioned before that when COMPQ hit the 38% of the Sept rally, it began working off Sept gaps/fibs, which is a change from before (a few days ago) when it was still getting support from April gaps/fibs.
So, sitting near 50% of the September move should be a consolidating area. If (when) it breaks, it may come back to retest, but IMO, there is more correction ahead, just a matter of time.
By way of example, the April rally used the gap of 1923:2005 (which straddled th 50% retrace of 1973) repeatedly after May 22 high. It even used that zone in Sept rally (the so-called "gap echo".
Even tho' these are COMPQ #, the overlay with NDX is good. The COMPQ is IMO more amenable to gap and Fibonacci retrace analysis than the NDX. Because the COMPQ includes small caps, it is worth watching the NDX/COMPQ ratio. Today, the NDX closed at 1413.8, 2 pts above the 50% retrace.
the Gaps chartLabels: bisects-forks-medianlines
At last, over the rim
of the waiting earth
the moon lifted with
slow majesty
till it swung clear of the horizon and rode off,
free of moorings
- Kenneth Grahame,
The Wind in the Willows
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