[madtrader]
Wed Feb 20, 5:58pm PST Market
I said I was going to stick my neck out and call this correction over. After further checking, I am even more confident that we have seen the lows. For the major averages, a retest of the September lows just won't happen. I suspect this will disappoint a lot of technicians out there. Especially those looking out for a "W" bottom. If you must, there are tons of individual names with "W" setup, but not so with the averages. In the early days of the bounce off September lows, I was an outright bull on Nasdaq and had a lot of reservations on the DOW names. The correction in the past month has me reversing my views. One cannot deny the outstanding performance by the cyclicals. Going forward, these will have to the new generals. Tech stocks, by nature should be cyclical type stocks as well (capital goods). But for the most part, the big cap tech names have underperformed their old economy type names. With DJI pulling back less than the typical 38% during this period, I wouldn't at all be surprised to see DJI post a new high for the year in the coming days. none
[madtrader]
Wed Feb 20, 1:18pm PST Market
I am going to stick my neck out there. This is probably the first rally I have seen in a long while without technical indicators been really oversold. By that I mean the reading of VIX, the reading of RSI, etc. The rally today was done with bigger volume than the previous few sessions. DJI and SPX looks like they are done with the selling. Also with QQQ doing a hammer at the bottom of the Bollinger Band, it is a clear reversal signal to me (we spotted it intraday too). I believe QQQ should be able to rally back to 50 DMA level, which is near 38 to 39 range. Keep in mind that I believe we are in a trading market, so you have to be careful on which ones you pick up. During this correction, there are quite a few issues that met or broke their September lows. I would want to stay away from these market underperforming names. Try and stay with the names that have held their ground or making new highs. There are tons of small to mid cap names that fits those criteria. none |
