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Strategies & Market Trends : Technical analysis for shorts & longs

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Dec 29 4:00 PM EST

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To: Johnny Canuck who wrote (40445)	12/10/2003 12:02:06 PM
From: Johnny Canuck	Read Replies (1) of 69300

TradingMarkets.com Here's What Volume Is Telling Me Tuesday December 9, 4:38 pm ET By Tim Truebenbach Most of the major averages and leading stocks are undergoing a correction that most likely began in mid-October. Leading stocks have been taking hits left and right. Sandisk (NasdaqNM:SNDK - News) was a market leader since April, but has felt the weight of its gains over the last few days. Yahoo! (NasdaqNM:YHOO - News) has held its 50-day moving average up to this point, but in a sweeping correction, that may not hold for long. The Nasdaq and many technology and consumer related issues have led the market's rally. The index is still up over 40% for the year and will most likely continue higher after this correction is over. I have seen a lot of evidence that higher stocks prices will prevail over the intermediate and long-term. The economy is continually improving amidst a low-interest-rate environment. The indices have not been falling on heavy volume which indicates orderly exits by large institutional investors. Many leading stocks have been falling on below-average volume and we are seeing more and more IPOs come to market. Initial public offerings are the companies that can provide continued leadership to a prolonged rally in the future. In the short-term, it is very important to follow the market and leading stocks' price-and-volume action. If volume gets consistently heavier as prices decline, that may be a sign that the landscape is changing. Currently, that has not occurred as the Nasdaq, for example, has only seen two higher-volume declines in the last nine trading days. This is definitely not a time to be on margin, and probably not even fully invested. When we start to see accumulation again, it will be time to move capital back into the market. timt@tradingmarkets.com

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