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Strategies & Market Trends : Market Gems-Trading Strong Earnings Growth and Momentum
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To: ColtonGang who wrote (5432)2/27/2001 5:30:32 PM
From: Dave Gore  Read Replies (4) of 6445
 
Here's a grim question - Are Daytraders extending the pain of the Market's fall?

A friend and I were talking today today about the Market and came to the hypothesis that scalp- and day-traders may actually be responsible for the slow death we are seeing in the Naz market and especially the tech market.
In the past, on Black Monday in particular, we got a horrible 1-1/4 day selloff on massive volume and it was over and that was that.

Now, we have so many traders taking a point here and a point there as the Market drifts down that it resembles a slow death. Since some are actually doing pretty well and more are shorting than ever before, not everyone is getting killed. But the poor souls (or should I say, "poorer" souls) with longer term positions or with money in tech funds are getting killed. And that represents much of America. The whole tech sector is trading in something like a giant Bollinger band with a downside bias that just doesn't want to end. Volume on many days is not even that high.

This is a controversial topic and one that I don't know the answer to, but I do know this - until we get a capitulation I can't see the bottom, can you?

Are people going to stubbornly hold until NAZ 1500 or DOW 8000, if by some stretch of the imagination we get there? Or is there some reason we really don't need a final capitulation to rally back up and hold key support levels? I wonder.
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