George, in this chart are two additional parameters pointing to the parallels with the February low:
stockcharts.com[h,a]dacayiay[dc][pb50!b200!f][vc60][iut!Ub14!Ll14]&pref=G
The same kissing of the 30 level in the RSI, and the same or even greater excursion of the Wilder's DMI+ and DMI - to levels not seen since September (worst than the February valley and peaks respectively, and much worse then the last run to the May high, from May 7th on, before the nassacre started.). Because we did not get the rest of the indicators lined up, I feel that the rally is going to be a false one, but I think that a stock like QLGC might have a good chance to run past $38 and probably peak again in the $42/$45 area. I am not going to unzip more my bear suit (half unzipped is enough), since I do not have a good handle how far this can get us. My best bet is by the second to the third week in July, this mini summer rally will be over, and right now I am leaning to less than 200 Naz points from the bottom, or about 1526/1555. Only if the volume increases dramatically, and new highs get above 180 within a week, do I see further expansion above 1555, and not by much (just some 40 to 55 naz points higher). Between now and July 4th, we may have a pattern similar to the May 7th episode, a sharp thrust up of a day or two a reaction, and then after July 4th another run. My strategy will be to get out of the 3 Q member at an appropriate time tomorrow (possibly waiting until afternoon), dumping few losers, and running with the expanded core and some of the other swing traders accumulated here for some 10% to 20% profits, if I can get these, gradually reducing exposure by the second or third week of July to the 65% to 85% cash level again, and zipping back the bear suit for the summer doldrums (g).
Zeev |
