Security Trader Comments 8/12/01
Markets remain in the 'leaky tire' syndrome. Every time they pullback to supports they get a smaller and smaller boost of air that gets them rolling back up to resistance areas and then they have to go back for more air. We mentioned last Thursday that we were at supports in the major indices where one has to expect a bounce. We got the bounce, however, many sector indices did not bounce which means the bounce was not widespread which is what you want to see for a market reversal, especially at major supports. As for this support area, I will use the OEX (see daily drop-down menu) as an example which is the same look that many other indices are showing. Its showing a triple bottom formation...objectively, you can only say that the more often you test support, the odds go way up that the support is violated / penetrated. Its similar to a stock or index continuously pounding on an area of resistance, it usually means an eventual breakout of that resistance. The longer stocks or indices meander around a support or resistance, the more likley it penetrates the area that it is at.
BKX (Bank Index) - Rising wedge violation.
BTK (Biotech Index) - head & shoulder breakdown.
TECH indices - Some had a small bounce on Friday, but many did not participate (ie Software, Internet, Computers)
INDU (Dow 30) - The best bounce of all, but back to / near maj resis. |
