New technologies in communications, computing power and genomics caused optimism about the future to run wild. The emergence of online brokers such as Schwab and E-Trade cut stock transaction commissions by as much as 90%, allowing the home investor/trader to get actively into the game.

At Point A the final bull run first broke down through its uptrend line. A few days later the Nasdaq 100 regained that line and continued higher.

At Point B, the Nasdaq broke down through its uptrend line again, and never regained it. This was a signal that the run was losing steam.

Point C shows the Nasdaq's last gasp. After failing to regain the uptrend line, the drop right after the top was a SELL signal.

A second sell signal occurred on March 30, 2000 - just five trading days after the top trade. This sell signal was when the Nasdaq closed below line 1, only 15% from the top.

The Nasdaq bounced back up through the 'green line' but failed to hold that level. This was yet another SELL signal that the market was weak and that the party was over.

You can see where the sell-off below the green line was 'caught' by a previous uptrend line with a lower slope.

On the chart below the red arrow shows you where a previous uptrend line with a lower slope caught the breakdown of the Nasdaq off the top. The chart above shows more clearly how two days that closed below that uptrend line saw the very next day rally to recapture the line. This is not uncommon.

Ten trading days after the second rally back above the uptrend line, on May 9, 2000, that uptrend line was finally broken as the Nasdaq 100 closed at 3,444 that day. This sell signal was 28% lower from the all time top trade.

At points A, B and C in June and July of 2000, the Nasdaq 100 tried to regain the thicker uptrend line but failed all three times. This failure to regain this uptrend line gave another strong SELL signal. The breaking of line 2, drawn from the low after the Nasdaq failed to regain the lower sloped trend line after a bounce back rally, was ringing the last call bell for the Internet party. Line 2 was at 3,477 about 28% of the top trade.

If you think getting out 15 or 28% from the top is bad, if you had held on longer the Nasdaq 100 eventually traded down to close at 804.64 in October of 2002. This is 83% from the top trade. Simple Trendline analysis could have saved you over 68% from the first uptrend line break sell signal to the bottom.