Only a Darn Good Day (From TC2000)
If this is the end of the plunge, it was a considerably shorter descent than we were expecting. In the market you (and we) have to constantly be aware of how easily preconceived notions congeal. It's the reason we try to remind ourselves to “run scared.” You can't genuinely run scared without humility. There is no limit on how many times you change your mind. What is the optimum number? As many times as are appropriate – and not one time more. To do that you need not only humility but confidence. Sounds like a contradiction in terms. But it's not.
Did today mark the end of the decline that started with the May peak. It looks as if it “probably” is. If this carries through at all, it will have completed three legs down in the SP-500. The averages were sensational today. Breadth in various sectors was as good or better. Of 33 high profile new-economy stocks (mostly techs like Microsoft and Intel) 33 were up. Not a one down. Of 12 bellwethers, 12 were up. Of MG groups, 200 up and 37 down. My Universe of about 3300 stocks, 2431 up and 775 down. That's better than 3 to 1. In the Dow, 23 winners. In the Nasdaq 100, 88 winners. A good many breakouts and breakaway gaps today – not just advances but highlights.
If this is the end of the decline, it is itself a sign of a stronger-than-expected market. The mere fact that the market did not “test” the spring lows would be an indication of strength and bode well for the future. We need to see follow through. Friday the 13th has been a good day for launching important market moves.
The only thing missing today was volume as inspiring as the price movement. It was certainly adequate volume. But if you buy a Porsche, you want a spectacular stereo along with the engine, brakes and steering. So it was not a perfect day. It was just a darn good day. -DW |
