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Technology Stocks : Semi Equipment Analysis

SOXX 297.50

-2.6%

Nov 6 4:00 PM EST

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Donald Wennerstrom

To: Return to Sender who wrote (71399)	2/2/2016 12:22:51 PM
From: Return to Sender	1 Recommendation of 95378

Here are a couple of daily charts of the NYSE and the Nasdaq showing the October 2002 bottom. That bottom was retested in March of 2003. During this period of note how often the volume on upside days was higher than the previous downside days. Volume is oh so important for the market to make a major turning point. Not only are we looking for a 9-1, or a couple of 8-1 volume upside days, in close succession but... We also need to see conviction among buyers that the worst is over as those days show higher upside volume than the preceding downside day, week and eventual months. Here is the October 2002 bottom for the NYSE and Nasdaq: If Friday was a 9-1 upside day that was going to turn the market higher then why was volume so low? We should have seen a higher volume day than Thursday's down volume for the NYSE and Nasdaq: The Nasdaq was actually better looking on absolute volume but not a 9-1 upside day: When we get a lasting bottom virtually every index will begin to move higher on higher volume. Sellers will be exhausted. Even so, I expect many of us here and in the financial press will be actually discussing how well those who have been shorting the market have been doing. Just like at the 2002 bottom short covering may be given credit for the formation of the actual bottom on that day. Right now we have yet to even enter a bear market. I for one expect we will. I am not so sure that I would short anything right now though. I like to short stocks but like everyone else here I think the chance of a buyout, buybacks, or some positive spin on stocks, could create another decent leg up. RtS

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