Daily Market Commentary

10th Anniversary Of The 2000 Dot-Com Bubble

Wednesday, March 10, 2010
Market Commentary:

US stocks ended higher on the tenth anniversary of the 2000 dot-com bubble. Volume, a critical gauge of institutional demand, was reported mixed compared to the prior session; higher on the Nasdaq exchange and lower on the NYSE. Advancers led decliners by a 2-to-1 ratio on the NYSE and by nearly a 2-to-1 margin on the Nasdaq exchange. There were 50 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, down from the 62 issues that appeared on the prior session. New 52-week highs again overwhelmingly trumped new lows on both exchanges.

10 Years Since The 2000 Top!

Ten years ago, the Nasdaq composite hit a record high of 5,132.50 points which marked the top of the dot-com bubble. By October 2002, the Nasdaq plunged a whopping -78.41%. The Nasdaq closed at 2,358.95 today which means that it is still down -54% from its record high. This illustrates how difficult the 00’s were for US equities and reinforces the importance of following a proven investment system which works in both bull and bear markets. 

Market Action- Confirmed Uptrend:

Stocks closed with modest gains on Wednesday after the government said the US budget deficit widened to a record last month. Government spending was the primary culprit as the government continues to try and revive the economy. Since the March 1, FTD the market and a batch of leading stocks steadily rallied. The fact that we have not seen any serious distribution days since the FTD bodes well for this nascent rally. It is also a welcome sign to see the market continue to improve as investors digest the latest round of stronger than expected economic and earnings data. Remember that now that a new rally has been confirmed, the window is open to start buying high quality breakouts. Trade accordingly.
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