Greek Tick-Tock

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Well,the week's pretty rotten for the bears so far. I guess the market has taken it as a given that the Greek parliament is going to approve their austerity measures, thus weakening the dollar and strengthening equities. It'll be interesting to see if this is yet another instance of "buy the rumor, sell the news" once the official vote is over.

Looking at the NASDAQ Composite, you can see some interesting parallels between the left side of this chart (which is the summer of 2007) and the right side (which is now). You can see a strong push higher, followed by a significant dip, another surge to a higher high, and another dip, followed by some more strength (but not enough to make a new high). It's worth watching to see if this pattern continues to hold, since we know what happened last time.

Picture 1

Looking closer, this time at the NASDAQ 100, you can see we are just about at the midline of the huge range that's been confining the market for many months. We were at the lows of this range not even two weeks ago, and I guess the bulls are counting on at least a recurring trip to the upper end of the range. My only caveat is that there's a fair amount of overhead supply at these levels.

Picture 2

Looking at the intraday chart of the Russell 2000 is the main thing keeping me from getting overly aggressive owning stocks. There is a very well-formed head and shoulders pattern, and we have retraced just about to the neckline. I won't be shocked if this neckline is badly violated, thus damaging the pattern, but it is worth watching in the meantime. These days, it seems the only assured things are that LULU goes up every day and GS goes down!

Picture 3

I confess I miss my normal daily "routine", since being on vacation definitely makes it much harder to keep the blog in its usual shipshape state. I'll try to stop apologizing about it, but I doubt it'll happen. I just have to keep plugging along!

Continued good luck to all of you, and hang on to your hats while this Greek situation finally moves along.