OK, well here's my take - the short covering run, which I thought would give NITE a small EOD rally, actually occurred earlier - in fact, after I covered (I've been shorting and covering many times) the last time, at 50 1/2, NITE took off on its run to over 52. I strongly believe it was a short covering rally (and since I regularly short NITE, I have something of a feel for shorting action).
I thought NITE would break the 50 level before a rally - there are two kind of breaks: the utter panic break, which makes the stock head down by several points... this is a break that leads to trouble, because of the additional damage it does, and this was the danger *early* in the morning. That fortunately did not happen, otherwise NITE would be in deep trouble. The second kind of a break, is a capitulation break - and paradoxically, is desirable. That is what could have happened when it was hovering at the 50 1/4 level, and I actually thought it would. It would have been painful at the moment :( but constructive longer term, because it would have flushed out all those who want to sell anyway. Once those holders are out, NITE's progress would have been less obstructed by sellers as it moved up. I wrote a post about that once, and got into a dispute w/ Mr. Norris, who is now strangely absent. The story, again, is volume. Today, we saw higher volume. At the time of my dispute w/ Mr. Norris, I pointed out the issue of volume. Had we broken through 50, to 48 1/2, and we had our capitulation selloff, the subsequent reversal, would have been very constructive. Why? Because in addition to flushing out the sellers, *****it would have brought out bargain hunters*****, and so the volume would have been much higher (6-7 million). Instead, we had a churning volume, and to have a highish volume on a stock that declines, is not bullish, if it does not include bargain hunters. Today, there were very few bargain hunters, as everyone was watching the 50 level, both buyers and sellers - the sellers who would throw in the towel *finally* needed the 50 to break (they didn't, and NITE is stuck w/ them obstructing a rise), and also bargain hunters were looking at 50 ("I want to get into NITE, but not over 50, considering the short term risks - I want to get in at the bottom"). Again, not bullish.
So, here we are - no pre-earnings run, and the scenario is developing the way I've outlined. Meanwhile Mr. Norris, who came on here with his ridiculous claims, has zero standing at this point. I mean, what about his "inverted head and shoulders"? I think he's got his head and shoulders up his a**. There are two possibilities: either his style of TA is worthless, or his interpretation is worthless. EITHER WAY - his analysis is *WORTHLESS*, and provably so. He ridiculed watching of the LII, and intraday activity. Yet, it is this exact activity which told the story - not abstract home-made charts interpreted by a simpleton. The story was, that the trading was very, very bearish, there was selling, FBCO, CIBC etc., were selling like crazy, and I've been sounding the alarm over the way NITE is trading, and how weak it is, how it is not responding to positive news, markets, sector activity. That was telling us that something is very wrong. Eventually, I decided to go short, and make money on the short side. That has been absolutely the right strategy. At exactly the same time, Mr. Norris was proclaiming breakouts, climbs, supports etc. - all utter nonsense, and when challenged, he argued. Now he's disappeared. At this point, as he has ZERO credibility, and should he ever appear again to spam his worthless site, everyone will know what it means: the guy is a contrary indicator, it means time to sell. That is not surprising - when the clueless are bullish, the smart money sells - works every time, since the beginning of the market.
Morgan |
