Interesting:
A relative strength chart of the Nasdaq-100 vs Nasdaq Composite -- to see what the leaders think about the market.
xocharts.com
Looks like the leaders are lagging.
Also, the McClellan Oscillator for the Nasdaq turned to Xs:
xocharts.com
while the McClellan Summation index for the Nasdaq turned to Os:
xocharts.com
The Oscillator going into Xs suggests we were oversold and are getting short covering rallies. The Summation index going into Os suggests more pain for longs on the Nasdaq.
Also, Nasdaq percent advancing is back in Xs, from oversold:
xocharts.com
NYSE Oscillator also bounced into Xs and Summation has been in Xs for a while:
xocharts.com
xocharts.com
xocharts.com
What does all this say? NYSE good, Nasdaq bad. Unless you want to play the dark side.
What am I doing? I am buying oversold Nasdaq stocks on every 10% dip in my long term account which has been in cash for a little while, i.e. for every 10% that CSCO falls, I add some, that sort of thing.
I am also just playing oversold rallies. Partly because the Nasdaq really has been mostly trendless, and most of the stocks I follow are trendless right now. And I've learnt that buying my favorites when they get oversold is not a bad idea. I sell when they start to breakdown, and every now and then I have got lucky and caught the bottom when they got oversold and hit the start of a new trend. Hopefully this will repeat sometime in Oct-Nov. In the meantime the only way to make money seems to be to follow trendless rules (buy oversold, sell on breakdown from overbought/short overbought). I'm using CCI as my overbought/oversold indicator with the +DI/-DI/ADX as my trend indicator:
xocharts.com (and click the top left Stockcharts.com link, that has the charts and parameters I'm using). Whenever the ADX is below 20 or in a downtrend, the stock is trendless, or going trendless. When this is so, I follow CCI for overbought/oversold (CSCO isn't quite oversold yet).
But what do I know . . . I'm just a programmer, what do I know about charts and numbers and technology companies (all my software, engineering, math and physics classes notwithstanding!). Follow me at your own risk! :-)
-Atin |
