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Went back and studied the Nasdaq parabolic advance following the November 1999 breakout. Wanted to see what the first real pullback looked like after the big down move in markets on Friday.
Nasdaq went vertical for 10 weeks, reaching nearly 10x ATR's above the 50SMA before its first close below the 20EMA, which came after a sharp 12% pullback in two sessions.
$SOXX just fell -12% in two days after hitting just over 10x ATR multiples above the 50SMA on Wednesday... First close below the 20EMA on Friday.
Wanted to compare the two as $SOXX $SMH and semiconductor stocks share many striking similarities with the Nasdaq and internet leaders of the 90's.
Also worth noting that many of the leaders during the first parabolic advance on the Nasdaq in 1999 did NOT make new highs again, even though the index grinded another 30% higher.
If using as precedent it's likely we saw some capitulation on Friday and could find a low next week. Would expect wide ranges, volatility, and tougher trading conditions. Just for studying and entertainment purposes.
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