I don't know what the next chapter is, but the new leaders are flashing bright lights right in our face, sadly CSCO is not among them, it's too big now, almost a proxy for the economy.
Someone sent me this, this is how I see the market near term.
<<What we are experiencing is a phenomenon that the us TA guys call "Market Thrust". It
occurs on average about once a year.
When markets become very oversold, think of them as a coiled spring that is being
compressed. When the compression pressure gives out due to fatigue (no more sellers),
the spring makes a violent move upward.
Naturally, the best stocks are the first out of the box and the first to cross the finish line.
Cien, extr, amcc, jnpr fall into this category. Lu, nt etc do not.
So, it should be no surprise to see quick doubles and even triples in a couple of weeks.
How about that.
Here is the pattern:
1. Odd lot short sellers are the last ones in to short. These folks are a leading contrary
indicator. (See the Yahoo Cien thread for examples.) A buy signal.
2. Panicked longs rush in to buy puts to hedge the remainder of their nestegg. The
put/call ratio and the volatility index reach highs. A buy signal.
3. Investment letters turn bearish. A contrary signal. A buy signal.
4. Volume begins to dry up on down days, and increase on up days. A buy signal.
5. Savvy TA traders step up to the plate, next comes savvy short sellers who cover, as
volume increases, next come the institutions...the big hitters, and volume literally explodes
upward. (Record yesterday.)
6. Odd lot short sellers throw in the towel, just prior to a technical pullback.
7. The pullback will not retrace the full market thrust, no more than half, most likely
38%...a Fibonacci number.
8. Savvy buyers will buy the dip.
....and the cycle continues.
It has been going this way for several hundred years.>>
B |
