Pretty good chartist analysis, Dale. I'd add a few points:
1) A retest of the bottom after a span of several months, usually fails to break it on the first try. This gives plausibility to a bounce before new lows are set... or a minor breach, then a bounce at the moment of despair.
2) My charts suggest a bounce around 1750 can happen Monday.
3) In April, stuff rose even on bad news. At a certain point, bad news is expected and ignored.
4) A huge fall Monday seems unlikely. Compared to Hell Week in April 2000, we had a pretty mild Friday. The DOWdy, on the other hand, looks downright scary.
5) Over the past 3 months, different chart views have caused me to predict bottoms as low as 800 and as high as 1619. Once 1750 is breached, I believe a breach of 1500 is certain soon after. However, since I chart the DOWdy needing to drop to 8000ish territory, the real NASDy bottom could be way lower than 1400s and 1300s.
6) VIX breaches of 35, and especially, 36, will produce bottoms within 1-3 days, per recent history. Breaches of 40 have always reversed in one day.
7) There may be no Saudi prince to catch the falling knife this time.... curbs or not, we may see a one-day drop beyond our imaginations, soon.
8) With everyone bearish, a contra-indicator rises. In fact, today MIGHT have been the bottom. A lethargic, haphazard rise from here could keep us second-guessing for weeks. The MMs would love it.
9) I don't think so. We bounced off a non-support line today and further support is soft till 1638 and 1619 (the April closing & intraday lows. The objective big picture view says institutional tax selling/window dressing continues till the last week of Sept.
10) The first low breach & rebound requires a retest. Previous bottoms have been retested between 3 and 7 trading days after the new low is set.
11) Basing patterns of stocks often require a second retest a few weeks later. I expect the NASDy to act similarly... sort of an index dead cat bounce. However, the 9 month lag in FOMC interest rate cuts suggests October/November will be stimulated by the Jan/Feb cuts, and the April low could predict a January final dip.... which corresponds to projections of key sector flatness (such as the SOX)in coming quarters. Thus, I expect a mild retest to replace the Oct/Nov bull with a Dec/Jan bear cub. Then it oughta be pretty clear sailing through May, when the last (August) cut impact is reached.
12) China's entry into the WTO is anticipated in Sept or November. I note that CHINA, SINA, and UTSI were all green today. This sector desrves watching. UTSI is especially worth watching since it should not see huge institutional selling.... only today did it breach the 1/1 level but rebounded, so a classic bull/bear struggle should ensue with 12 as the worst likely interim downside.
13) Even though we've become more value-sensitive, don't buy the hooey that all will drop to proper values. If everything was priced right, nothing would move. As well, the indexes could stay flat while good stocks & sectors soar.
12)There were 102 52wk highs today; I only recognize one: SLNK. There were 373 52wk lows; see if you recognize some of them:
A ACPW ADCT AKAM AMD APAT AVCI AVNX AWE BEAS BLDP CACS CANI CHKP CHL CIPH CKFR CMVT CNET COMS CORI CORV CPKI CPST CRA CRGN CRNT DCLK DIGL DIS DOX ECIL EMC ENE ENMD ERICY ESPD EXEE EXFO FCEL FLSH GILTF GMH GX HLTH IBIS IMNY INFA INFY INHL ISSX ITWO JAZZ JMAR KQIP LEON MCDT MCDTA MCEL MLTX MRVC NETE NEWP NGEN NMSS NOK NOPT NRG NT NUFO OCPI ONNN OPNT OPTV ORCH ORCL PALM PDII PGTV PIII PLUG PMTC PRTN Q RBAK RHAT RSAS RVSN SANM SATC SBAC SFA SFE SIRI SNDK SNE SNRA SONS SQNM SWIR SYXI TEK TGEN TLAB TXCC VECO VIA VIA.B VITR VRTS WAVX XING XXIA plus a few brokers. NASDy decliners led advancers 2365 to 1190 with 3 shares sold lower for every 2 that traded higher.
13) Among those in the top 20 percent gainers that were not even above 7% at 2 pm.... yet stormed high in the final hour, suggesting we review for squeeze possibilities:
BYND 27%(has increased by more than 100% in past 5 days)
AKC 27% (least likely)
XYBR 14% (at 2.73, if it breaks above 3, mucho squeezo)
TPTH 13% (plenty shorts for squeezo)
SITE 12% (at 2.80, the CEO bought $175K on 8/13 at $3.52, but funds have sold far more in 8/01)
I say TPTH & XYBR are the most likely. And another, RSTN, bears watching.
14) In conclusion, it ain't over till it's over and considering scheduled events, Tu 9/11 thru Wed 9/19 is the period of least resistance to mini-rallies. From 9/20-10/5 is the period of greatest disaster potential. Who knows where the bottom is? |
