Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: tradermike_1999 who started this subject	11/17/2000 9:04:49 AM
From: tradermike_1999	Read Replies (2) of 74559

For the past few weeks people on CNBC have called a bottom everytime the Nasdaq went near 3,000 and bounced. This week it broke it and another wave of bottom dippers came in. Commentators again yelled bottom. Abby Cohen came out the next day and said that stock valuations are the cheapest they've been all year and everything is super duper. Eventually the market is going to run out of knee jerk bottom dippers and then it will crumble more. The truth is it is virtually impossible to call a one day bounce a true bottom during a bear market. Do not believe these people when they say that. A real bottom won't come in a day. It will take weeks, perhaps months to build. Here are some signs I'll be looking for: 1)An interest rate cut. 2)Oil below $30 a barrel 3)A major market strategist like Abby Cohen calls this a bear market. Analyst surveys show bearishness - instead of the record bullishness we have now. 4)Retail, construction, and home financing stocks bottom out and begin an uptrend 5)A black bear on the cover of a national news journal such as Time Magazine or US News and World Report, the Weekly World News doesn't count, because they call for a market crash every issue. 6)All four major market averages(DOWJ 30, DOW transportation, S&P 500, and Nasdaq) go above the 150 day moving average and find support there. 7)A change in trend on a weekly Nasdaq line chart - Nasaq makes a higher low and higher high. I'll be watching number 4 very closely. Once I think the market bottoms I plan on placing a large amount of money into long term holds beginning with these sectors. Until then I will just continue to mainly play short term breakouts in the tech sectors and take short opportunities when I find them. These things will take time to develope. By late spring at the earliest. And that's probably being too optimistic.

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