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Strategies & Market Trends : John Pitera's Market Laboratory
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To: Jorj X Mckie who wrote (5752)3/1/2002 2:17:29 PM
From: John Pitera  Read Replies (1) of 33421
 
the NASD 200 period MA on the 30 minute time period chart is at today's high at 1786, but we've broken the downtrend line on the 60 minute chart, so onward to 1800.

The SOX is back over it's 200 dma, which really does not mean very much for the SOX, since it's been coiling near that area. As I mentioned a few days ago the SOX 200 50 and 21 DMA are very tightly coiled together for about 7 weeks now. Indeed, the 200 and 50 dma are right on top of each other. They are have been grouped tightly together for the past 7 weeks or so. Bill Williams of Chaos Trading Fame called this his Alligator formation.

I'm positive we'll see a very large directional move in the SOX in the next 3 to 4 months. If the SOX is to break down, I feel it should be in the next 3 weeks.

that's the window were it could break down, but overall the evidence that I see is that the next 100 points is going to be up in price for the SOX.

BKX not participating today... and the BTK is down on a very strong day, it's testing it's early FEB low. So that's a more cautionary datapoint.

Is the BTK still helping to lead the Market, or are we seeing a leadership rotation where the bubble era high valuation stocks continue to weaken in leadership importance and we're seeing the market lead by real companies, with more legitimate valuations, balance sheets and income statements.

It looks like the market is realizing the value of companies that are generating significant free cash flow streams. And that would be a very healthy development.

John
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