Rich, the $170 is a good area for the reasons you cited and it is also a full 50% retrenchment of the breakout advance (the middle point between $120 and $220), more fanatic observers would require a Fibonacci retracement of about $62%, but with the volatility of this stock, who knows. Of course, the best reason for $170, is that at the beginning of this rally, I "promised" Steve that he'll get his $167 within six weeks, and we are not even half way (VBG).
I should warn that if you manage to get some stock in the $170, it may be due to a variety of reasons we will not learn about, but after the fact, if the reasons are more fundamental, such as another slew of technical problems associated with RMBS launch (for example, a rush of burning PC that were not cooled well enough, or yields that refuse to come down the learning curve, or a change of heart at INTC or whichever...), then the retreat to $170 may only be a prelude to a major retreat to the breakout at $120 or so, and possibly a prelude to another bear stage in the life of RMBS, that is why I for one, will be using stop losses, If I indeed manage to get back in (I got out yesterday at a less than optimal price, I would say, but still, above the prior high) since I have no way to forecast changing conditions in this rapidly changing environment.
Right now, in those stocks that are still showing sizeable gains, there is a big danger, IMHO, of giving these all back since there is no arguiong that there is a big divergence between the NAZ 1000 and the Russell 2000 on one side, and the general market on the other side. Typically, such divergence do not end in a pretty fashion, eventually the divergence is resolved by having the nifty join the general majority of the stock in the decline. I think that we may have another to "waves" up in which this divergence will continue and be amplified (my current guess is mid March to late April as the first (followed by retest ogf the lows we are going to set in the next two weeks or so), and then another one starting late June to possibly late August, with topping action into the election. Of course, this is just a very "generalized" road map and probably be proven wrong, but I like to have an idea of where we are going, or else, we'll never get there (G).
Zeev |
