Ron:" Catastrophic Gradualism "
>Aren't there any BigBoyz in the Naz ?
yes, of course, Ron - MSFT is the largest cap company in America.
Berney keeps a list of ~60 "BigBoy" stocks from the OEX-100 and NDX-100 that we do F/A and T/A on. Generally, when we're yakkin' about "BigBoyz", we're talking about non-tech sector bellwethers; ie., GE, (IBM), T, WMT C, MRK, XON,... that drive the industrial, (tech), telco, retail, financial, pharma, oil sectors... for example.
In the past, whenever all market sectors have gone down, below the S&P-500 index's 200d EMA, it has been a "dip" whereby "buying down" in a pyramid of increasing accumulation has proven to be better than random-periodic timing of (long-term, equity) investments. At S&P = ~128, the market is down ~10% from it's ~142 high; we assume that 25~35% would be the maximum extent of any S&P-500 downswing.
What I'll do is move 10% of the capital I have available for long-term investment into F/A+T/A selected "BigBoy" sector bellwethers when the market is down ~10% and below it's 200d EMA. I'll move twice as much $$$, 20% of my available capital into the market if/when it goes down more; 30% at another perceived support level; and 40% lower still = 100% of what I have available for long-term equity investments.
If the market recovers, I will have "bought the dip" and beaten any random-periodic investment tactic. If the market does not recover from a 25~35% drop, there are no winners, and no winning equity investment tactic: ie., catastrophic gradualism.
T/A specific to QQQ...
...the sector is not "oversold", but it is unlikely to ignore it's 50d EMA around ~119 and the fib level around ~117.3 that it just bounced from. fwiw, on my chart the 'near-support' is around ~113.5 - there is an apparent UpTrend Line there as well. Next 'far-support' is around ~107.5 and the "base" is 98~100. It would not surprise me if TheDonald is predicting an UpWave here, off of Friday's doji = neutral sentiment.
>So I can stay short QQQ until 98.5? Whoopee!!!
I have no idea what the extent of this correction will turn out to be, Ron - but I congratulate you on making your QQQ trade "with the market" trend - well done!
Monday and Tuesday are important sessions, imho. If the equity market ignores the (50d EMA, 200d EMA) T/A levels it just passed, it would mean that we are in a "crash mode" sentiment, where greedy "dip-buying investors" such as myself are far out-numbered by fearful "momentum sellers".
As an investor, Ron - my biggest concern is not the BigBoyz or NazBoyz bellwethers. Given 24+ months, they have always given me more satisfaction than my bonds alternative. MonsieurMarket always has something new - last year it was Asian currencies and capital market liquidity; we are perpetual students (or, blissfully ignorant :)
...from New York Times Sunday business section :
Percent of market value that represents internet companies :
Nasdaq Composite = 49.2 %
S&P-500 Index = 23.0 % <=====
Russell 2000 = 5.1 %
-Steve |
