May 22, 2000

It seems the long-term

Nasdaq

chart I showed

Friday had an effect on many readers. While most of them said something different about the chart, they all sent the same message: A 2000 target is too low.

Some said the top measures to 2700. Some berated me for not using a logarithmic scale in which the uptrend line would come in at a different level. Still others drew in different lines and said 2500 was a more likely target, and one or two readers even suggested 2900.

I was simply suggesting that the longer-term trendline dating back to the last real low in the market (1994) came in around 2000 on my chart. It doesn't have to get back there, but it could. That's not the point. The point is that if we break this uptrend line dating back to 1998, we'll be breaking a two-year uptrend. Hey, just a couple of months ago investors thought a week was long term in this market and now all of a sudden a two-year trend means nothing?

If we break this uptrend, the downside won't be good, but let's not spend time on the downside target right now. Let's focus on the broken trend. Should we break the trend, it would not take months to repair such damage; it would be years.

This is about having a look at the

Qualcomm

(QCOM) - Get Report

chart and realizing that this stock will not see 200 for a long time to come, if ever. The bubble that took these stocks to lofty valuations has burst. Because so many investors got burned in the April decline, I find it hard to believe they are going to jump right back in to these stocks with the same wild abandon we saw in January. That trend is over.

It takes a decline of some consequence to bring a change in leadership. We have seen such a decline. Right now the market has lost its leadership and without leadership, we can't rally very well on the upside. The numbers on the oscillator suggest we may get a lift early this week, but until we get a bottom worth buying for, the upside remains limited.

Overbought/Oversold Oscillators

For an explanation of these indicators, check out The Chartist's

primer.

Helene Meisler, based in Singapore, writes a technical analysis column on the U.S. equity markets on Tuesdays and Fridays, and updates her charts daily on TheStreet.com. Meisler trained at several Wall Street firms, including Goldman Sachs and Cowen, and has worked with the equity trading department at Cargill. At time of publication, she held no positions in any securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. She appreciates your feedback at

KPMHSM@aol.com.