nv, the fear that was in the market that created the buying opportunity in early april has now been replaced with greed.
this is an excerpt from larry mcmillan's weekly update from may 4th (available free by email at optionstrategist.com), his main put/call ratios and breadth oscillators remain on buy signals this week, but he waits for cross-overs to go to sell signals, the dow has gone up 1800 points in a short time, it's time for a rest, i suspect the dow will could give back 40-50% of that move in a correction.
>>>>>>>There is one final "indicator" that I want to point out. It is a subjective
one: on Wednesday, after a brokerage firm upgraded Cisco (CSCO), there was massive
call buying in the old tech names that I thought had mostly been relegated to
the "garbage heap." Names such as Akamai (AKAM), Excite@Home (ATHM), CMGI
(CMGI), Cisco (CSCO), Earthlink (ELNK), Extreme Networks (EXTR), Corning (GLW),
Inktomi (INKT), Infospace.com (INSP), Metromeida Fibre-Network (MFNX), Novell
(NOVL), Palm Computing (PALM), Sprint PCS (PCS), Portal Software (PRSF), Sycamore
(SCMR), Safeguard Scientific (SFE), Storage Networks (STOR), and Verisign(VRSN)
all had option volume more than double their usual levels! Thus, speculation
was rampant in a huge way. In my opinion, it is not a healthy sign to see that
kind of excessive speculation in these broken-down names.
So, overall, we're still bullish but tentatively so. Some of the chinks in the
armor are beginning to look worrisome. So be sure you've taken partial profits
on a good chunk of your long positions and tighten your stops. |
