NASDAQ HISTORICAL PATTERNS & FORECAST USING TCI DATA

Nasdaq: Analyzing the Bull Markets Using TCI

Nasdaq is one of the world’s most popular and active stock markets. In this analysis, we will examine the Nasdaq Composite Index since 1971 using TCI analysis. We will focus on the three bull markets of the past 20 years. Our goal is to estimate how long the current Nasdaq bull market, which began in 2009, will last. 🔗 More: » Trading Center Indicator (TCI)

Nasdaq & TCI Charts (1971-2013)

The following multi-chart consists of three individual charts:

1) Line Chart on Nasdaq Closings since 1971 (1st in a row chart)

2) TCI Long Chart since 1971 (2nd in a row)

3) TCI Short Chart since 1971 (3rd in a row)

The Nasdaq line chart below covers the period from 1971 to 2013. The TCI charts help us better understand Nasdaq’s historic returns.

Here are some key conclusions drawn from the two TCI charts:

□ TCI LONG:

Read more: Nasdaq Trading Signal April 2013

During May 2012, Facebook joined the Nasdaq by pricing its IPO at $38 per share. By the end of July 2012, Facebook shares were trading around $30, and today they trade between $19 and $20. But why did Facebook's shares fall so much? Is it because Goldman Sachs and other institutional investors are selling their shares? No, the real reason for the 50% drop is always linked to fundamental factors. At the end of July, Facebook reported slower growth and did nothing to ease concerns about future results. Let’s look at some key Facebook figures.

Key Facebook Figures

∟ Total Revenue and Net Income: Sales of $4.33 billion, EBITA of $1.07 billion, and net income around $0.77 billion.

∟ Important Ratios: Price/Sales = 9.3, Trailing P/E = 67.06, Forward P/E = 30.76, Price/Book = 3.12.

∟ Cash and Debt: Cash of $10.2 billion and debt of $0.7 billion.

∟ Market Capitalization: $41.52 billion (based on a share price of about $19.70).

(Source: Yahoo Finance)

Facebook’s story is similar to the .com bubble of the late ’90s. High expectations combined with weak fundamentals eventually create big bubbles. The Facebook bubble has now burst. This is bad news for current Facebook investors but might be a trading chance for others.

The 3rd Largest IPO in US History

Facebook’s IPO raised $16 billion, making it the 3rd largest IPO in US history. The largest US IPO raised $19.7 billion (VISA) in 2008, and the second largest raised $18.1 billion (General Motors) in 2010.

Read more: Trading Signal on Facebook Share 2012

After a period of absence, trading signals using the TCI technical analysis system have returned to Trading Center. The current TCI signal focuses on the Dow Jones Industrial and suggests the possible start of a mini bear market.

Here is the signal:

📈 TCI Chart on Dow Industrial since 2002

🔗 More: » The Dow Jones Industrial Average

As we have mentioned in previous signals, one of the greatest advantages of TCI analysis is its ability to visualize results clearly. In the following TCI chart, covering February 1, 2002, to February 13, 2013, the +10% level often signals mini bear market corrections of around 10%. Below the TCI chart, you will find a line chart of the Dow Jones Industrial closing prices for the same period.

Read more: TCI on Dow Jones February 2013

TradingCenter's Indicator (TCI) on the Dow Jones Industrial

Dow Jones Industrial has recently initiated a new short-term rally. The positive outcome of the Greek elections on June 17th and expectations that the Eurozone will soon offer a permanent and stable solution to the European banking crisis have renewed investor confidence. As a result, the Dow Jones Industrial Average (DJIA) closed at 12,824.39 on June 20th, 2012, significantly above its recent intraday low of 12,003.75 points recorded on June 4th, 2012. 🔗More » The Dow Jones Industrial Average

TCI in Action: Implementing the Trading Center Indicator on the Dow Jones Industrial

In the following table, you can observe the TCI in action. Point (A) marks the beginning of the current DJIA rally on June 11th, 2012. At point (A), the Dow closed at 12,411.23, which is above the 180-day Average Price of 12,403 points. This served as confirmation that a short-term rally was underway.

We have identified point (B) as the anticipated Middle Rally Top for the Dow Industrial. Point (B) falls 8 working days after June 20th, 2012, which corresponds to July 2nd, 2012.

Read more: Bullish Trend for Dow Jones Industrial

🏛️ Greek Stock Market Plunged 90% to 475 Points — Now It’s Booming and Heading Much Higher

Recently, the Greek Stock Market Has Entered a Booming Phase—But Why?

Greek Economy at a Glance:

The Greek economy has been in a deep recession for five consecutive years. GDP declined by 6.9% in 2011 and is expected to contract by around 5% in 2012. Additionally, unemployment is projected to reach 25% in 2012. The economy is expected to return to growth in late 2013, according to recent statements by Prime Minister Mr. Samaras.

ASE Stock Market Index Today at 752 Points

The Greek Stock Market Index (ASE – Athens Stock Exchange) closed at 752.2 points on September 25th. This marks an increase of approximately 58%—or 277 points—above its June 2012 low of 475, as shown in the chart below.

Why Is the Greek Stock Market Rebounding?

Over the past two years, the Greek Stock Market has been extremely bearish, losing around 90% of its value. The current rebound is considered a normal market reaction. Even now, Greek stocks appear to be undervalued. With the ASE at 750 points, the total market capitalization stands at approximately 29 billion euros, compared to a national GDP of around 190 billion euros. That results in:

∟ ASE Capitalization / GDP = 15% (a notably low ratio, even given Greece’s economic challenges)

Read more: Greek Stock Market Slumped 90% to 475 points

📱 Apple Stock (AAPL) Price Correction

Recently, Apple’s stock (AAPL) has experienced heavy selling. The share price has dropped from $644 a few weeks ago to around $598 today. The rally that began at the end of 2011 provided investors with almost a 100% return, as shown in the chart below (Yahoo Finance). This price correction is considered entirely reasonable, especially if it does not exceed 10% from the high of $644.

Apple’s fundamentals remain strong (P/E = 17.03 and Dividend Yield = 2.65%), and the company holds approximately $100 billion in cash. Apple’s current market capitalization stands at $558 billion.

Basic Numbers for Apple Stock

Below are some key figures and financial ratios for Apple’s stock:

Trading Center (2012)