This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

2005: Mark This 'Measure Move'

The editors asked me to throw together a brief look at how we're going to fare in 2005. Well, here's one for you: How about we reach the all-time highs by Dec. 31, 2005?

Sounds far-fetched? Pollyannaville? Maybe, but a simple chart of the Standard & Poor's Depositary Receipts (SPY) tells a very bullish story.

For ease of use, I employed an arithmetic chart rather than a log chart. With an arithmetic chart, the difference between the numbers on the X axis is the same number. With a log chart, it's the same percentage. Log charts are useful when you're trying to compare two different stocks. But when you're trying to figure out how far a stock might run, an arithmetic chart is best.

Before I get to the chart, though, it's helpful to understand the basic premise of "measure moves." Simply, that premise is that stocks (or indices) tend to move up a set amount, pause, and then, once they break out from the pause, move up by a similar set amount.

So on the basis of that, looking at the chart below, you can see that if leg No. 2 ends up equaling leg No. 1, and each leg takes roughly the same amount of time to complete, that will take us to just about the old highs in a year or so.

I know. This kind of stuff gives the fundies fits. But to those of us in the know, it makes perfect sense!

Gary B. Smith is a freelance writer who trades for his own account from his Maryland home using technical analysis. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Smith writes a daily technical analysis column for and also produces a daily premium product for called The Chartman's Top Stocks -- click here for a free two-week trial. While Gary cannot provide investment advice or recommendations, he invites you to send your feedback to .

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.24 0.00%
FB $117.81 0.00%
GOOG $701.43 0.00%
TSLA $211.53 0.00%
YHOO $36.94 0.00%


Chart of I:DJI
DOW 17,660.71 +9.45 0.05%
S&P 500 2,050.63 -0.49 -0.02%
NASDAQ 4,717.0940 -8.5450 -0.18%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs