With the Indies and the Trannies at new highs for the year and the Nazzies coming off lows for the year and a valid-looking, w-ish test of critical support around those 9/10 levels that I, as well as the indices and stocks themselves, have been harping on, also equivalent to a 61.8 retrace from Sept low to Jan highs on NDX, I see no reason why the techs can't at least play some catch-up for a while. Volume was relatively light for a major rally day, but not bad for a Friday. Additional factors include, but aren't limited to the breakout on DJI and SPX off "high wave lines" (sequence of long-legged dojis) - seeming to forecast a test of the '01 highs at least on those indices.
A signal could come as early as Monday morning. LBR, who apparently has been getting as interested in the techs as she's been in years, was talking up how much she liked them long yesterday in her chat room, both on the day and looking forward. She suggested that, given the day's performance and indications, the first pullback Monday morning should be a buy on the Nasdaq.
In this light, the ORCL headline may bring up three possible scenarios:
1) Major damage - it's a bummer, and the market sees it as a bummer: The stock is taken apart, AND the whole software sector gets hit, AND incipient profit-taking elsewhere in tech-land picks up speed, leading to a major re-tracement of Friday's gains on higher volume, and yet another, even more conspicuous failure to break the conspicuous downtrend in those conspicuous tech indices - suggesting overall that the techs really are as sick as the value-mongers have been saying, and that, at minimum, another test of critical Sept. '01 levels is in store; and, for that matter, that much of the excitement on the Dow and S&P may already be over;
2) Local damage - it's a bummer, and the market sees it as a bummer, but, though ORCL gaps down and never looks back, seemingly on the way to joining other stars of yesteryear at juvenile price levels, damage in the already beaten-up software sector is limited, and hardly touches anyone else: despite heavy losses to a high volume (former?) leadership stock, the tech indices follow through on Friday, somewhat meekly but still quite conspicuously breaking the conspicuous downtrend, on the way to a re-test of the year's highs, still dependent on additional catalysts for any chance of breaking out further;
3) It's a bummer - dig it! ORCL bounces and rallies hard - suggesting the market is virtually immunized to bad news - and the techs launch off the first profit-taking/LBR pullback, put another solid daily bar on top of Friday, conspicuously breaking the conspicuous downtrend, on high volume, commencing a major "damn-the-valuations" Wave 3 rally that hardly even notices the 50- and 200-DMAs and whatever other nominal resistance levels coming up.
Regardless of what happens on Monday, if 9/10 holds and the downtrend is broken in the near future, then I think your NASI and similar indicators will be very worth watching for evidence that an up-move is a "3" rather than a "c" or some other complex entropic rangebound thing. |
