Sonki & Sonny,
With this market everything is like a stair step. Are we going up or down?
If this advance is real then look for a 1/3 to 1/2 retracement tomorrow. Then the NAZ stabilizes and begins to move back up tomorrow. It would be nice but it doesn't have to close above today's high. However, we don't want to see it give up over 120 points tomorrow by the close. If it just continues to run tomorrow without stopping then WOW!
In terms of Seasonality, the last two trading days in May and the first three to four in June in most cases provide a strong rally. We have this on our side. If the trend remains during this bullish window we may have a shot at bumping up against the 3,750 level. Once through that, I would consider taking some profits at 3,800 (basically in line with the 3,400-3,800 trading range and previous NAZ spike) which should happen intraday, probably in early June. I would be surprised to see us close above 4,100 on two consecutive days. In short, we try to talk time but working with levels, support and resistance seems to be a better way to go in this market. Technical analysis is key at this time in my opinion. As time permits the gestalt has to be looked at on a daily basis if not several times intraday. Monitoring money flow, key stocks, volume, resistance and support levels and so forth.
In terms of money. Over 1 Trillion is sitting on the sidelines. June 1st pension plans and such on quarterly programs will turn over more cash to mutual funds and such. At some time that hoard will be unleashed.
Things to consider about trading on Tuesday. Many point to the small investor, yes we were smart and jumped aboard early. But it is a big market. Institutions were in there buying the stocks they wanted. Ex, QCOM block trades were close to 3x normal levels and stock fell initially then sprang up off the $60 level and closed above $76 (just missed filling the gap at $58, I had a limit order in at $58 1/8). Individual investors did not do that buy themselves and other stocks had similar action. The volume picked up during the last hour of trading, in my opinion that was big boys saying "it's for real". Others have noted the volume phenomenon as well. We did over 1.4B shares on NAZ today. Oct, Nov, Dec 99 and earlier, this would qualify as a strong day. People are comparing the madness of Jan-April during the 25% NAZ run up than near 40% drop. Many margin hounds, MO MO traders, day traders and such had their hands slapped and they are not going back to the cookie jar in full force, at least not yet <ggg>. In reality, this was a high volume day, just because the experts don't recognize it as such simply plays to our favor.
SDLI has left one definite gap around $200 and perhaps another small one around $180 or so, later on this summer you will get your chance to add it.
Lastly,
Fight the need for greed, once your up 100% or so on some of the trades take a little off.
Regards,
Good Article
'New Economy' booming -- summer rally ahead
Bullish megatrends keep you ahead of game
By Dr. Paul B. Farrell, CBS MarketWatch
Last Update: 12:15 PM ET May 26, 2000
LOS ANGELES (CBS.MW) -- Bubble bust. Nasdaq crushed. Dot.coms bleeding cash. Options vanish. VCs stop funding IPOs. Websites disappearing. Bankruptcies. No more get-rich-quick schemes. Tech's risky business. So, goodbye New Economy. Right? Wrong!http://cbs.marketwatch.com/archive/20000526/news/current/superstar.htx?s
No fear thread mates, embrace the future, place your portfolio in the path of progress and things will work out. just fine. |
