Technology Stocks & Market Talk With Don Wolanchuk Message Board

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Strategies & Market Trends : Technology Stocks & Market Talk With Don Wolanchuk

SOXL 41.73

-3.0%

Nov 7 4:00 PM EST

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To: da_cheif™ who started this subject	8/25/2002 1:58:32 PM
From: Runomo™	Read Replies (3) of 206772

We have the first three Naz positive weekly closes in a row in nine months. Note the baby steps from the bottom...58...55...19 points off a parabolic decline: siliconinvestor.com Last week's candle may look like a shooting star to some bears, but I've seen this often turn into a continuation pattern in a vigorous rise off a steep decline. Check out the second SPX weekly stick off this recent bottom as an example: siliconinvestor.com Naz weekly MACD histogram thrice positively divergent and started to tick down for three weeks in a row. For a position trader, I have found that this simple indicator is as good and reliable as they come: buy on the first weekly histogram down tick before the actual buy signal. Credit goes out to Trader Nick who taught me this simple and very reliable technical tool which also suits my long term trading style. Although the rally has come off lighter volume so far on the Naz, let us not forget that the initial decline also began on lighter volume. Most of the volume was used up in hammering a top or in this case a bottom. I don't buy the low volume argument. The other argument of the bears and even some of the bulls is that the 1192 Naz bottom needs to be tested again to validate it's longevity...well, look at the March 2000 top which btw if you turn it upside down looks almost a mirror image of 1192 bottom... and tell me why that top did not have to be tested again to validate it's long term validity?? Moreover, market internals which kept my cheer despite all the doom and gloom five weeks ago Message 17769186 continue to hold their own and improve further. I see a great disbelief in the rally among bears AND bulls alike. No one but Cheify is proclaiming a new bull market here. Even the bulls are saying that this is a bear market rally. Reasons.... all the usual Funnymental stuff. Yep, please don't argue economic theory with me....economics is da dismal science as far as I am concerned :)...those analysts now busy downgrading tech stocks based on economic outlook were the same who were busy upgrading those stocks two and a half years ago based on the new "virtuous cycle"...Ideolgy can be a very dangerous thing to your pocket. Most encouraging is how some of the leading bellwether charts are looking...CSCO...NOK...MSFT....IBM....T...and telecom finally showing signs of life...even the lowly ERICY had a climactic weekly volume reversal last week...check it out...looks good to me:).... I know general expectations are for a flat week next week as da market supposedly awaits da big boyz to come back from der Hampton retreats....well let's see if the market will do what is expected of it to do, but my two cents is that early week weakness which might see a temporary test of the 50 day ma will be followed by strength later on the week....imho. Mo

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