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Technology Stocks : Semi Equipment Analysis
SOXX 297.50-2.6%Nov 6 4:00 PM EST
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To: Kirk © who wrote (54051)10/3/2011 5:52:30 PM
From: Return to Sender1 Recommendation  Read Replies (1) of 95383
 
I looked back at the S&P 500 at the bottom in March of 2009 and found that the prior week had been running about 6 billion shares per day Kirk. I think when you look at the market trying to find selling has all dried up that you are better off looking at the trees rather than the forest. Some small cap high beta stocks that have limited institutional participation really have trading dry up near a bottom. But even low volume can take a stock down huge percentages.

With the big caps volume tends to pick up every time a new level of support is taken out on a major index.

Look at the 2009 bottom for the S&P 500:



And what about today's action? Lower volume to be sure but if we trade below the August bottom that volume will pick up:



Even with the high volume on the S&P 500 in March of 2009 many stocks in the semiconductor and semiconductor capital equipment area were bottoming on low volume. But it was that 90% upside day that eventually gave the all clear sign for investors to return.

I did not heed that call in 2009. In 2011 we are still getting nearly 90% downside days. We may be approaching a meaningful long term bottom, even quickly, but it may not be for a while yet at much, much lower levels.

I will be watching stocks like FSII for a sign that a bottom is actually coming. Talk about limited volume at the last bottom in March of 2009:



JMHO, RtS
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