Yes a case can be made out of that however I think one needs to keep an eye on hte semis and the PSE components if they hold well I think a test of NDX at 200 days MA would be good, I don't think that we are looking at a black hole scenerio here, for the amount of negativity we have held BKX great and also Dow, Drgs have come back and some of these reversals on CSCO and SUNW indicated a great interest, now look at the DOW and SPC charts for last three months, the wedge formed has higher lows although most of these breaks were tremendously strong but 3rd April TXN made a low of 128 yesterday it did not break that low, smae is the case with indexes, the PEG theory cannot be discarded, low P/E multiples theory is associated and fraught with low quality of 'economic growth', that is dying productivity, lack of innovation and a standstill world, I don't see any of these happening in our universe of stocks, this correction was overdue we have been calling for this close of divergence, the issue is that market overreacts, when it breaks it takes out the supports and when it roars it becomes unreasonably ahead of itself, we are now testing selling momentum, higer lows are positive things but if you ask me that I will short this market I would say no, look at QQQ low since 11/30 of 74 we hit that and held it, now to break this low we need new negatives that would come in shape of strong numbers by hte time we have these higher interest rates digested by the economy, these stronger numbers can take a toll. However I can see a bottom and a range in this market.
On the other hand if we see slowing down in next fifteen day issues of economic releases we will a major upswing, this market has the ability what it lacks is leaders after uncermonious beheading of CSCO's and MSFT's of the world, so good nice numbers on economic front plus some leaders and we are on track to 1455 resistance..
You bet on support is a big hearted bet, if you are right you would be doing great if it holds as a support we may see some erosion of your premium, I don't go into one sided bets I have claculated strategy and I know that what we try to do here is to make odds in our favor if I was so intelligent may be I would be working for GS without any worry of interday moves.. ces't le vie..regards |
