lisa; RE:" INX.X - Internet Index "
>what do you see on the IIX..?
...more on the INX.X version, beautiful - but you can see the same thing on AMZN; ie., it opened down, sold off, recovered (short covering?) and then closed a tick above the open. The "candlestick" looks like a "T", which can be interpreted as either a "hanging man", as in, "my position is hanging", which is bearish; or a "doji hammer", as in "I have plumbed the depths, and now I am prepared to hammer out a new trend", which is bullish. These candlestick (sentiment) indicators require confirmation by tomorrow's session to resolve, lisa. Looking at the sector bellwethers AOL and YHOO, they opened gap-down, and were bid up throughout the day; but again, this could be interpreted as either "hanging" or "hammering" your position, depending upon subsequent follow-through.
The 'nets are tempting shorts because of their (apparent) excessive valuations. AMZN is tempting because the point-moves are so large - hopefully, the percentage moves will be rewarding for everyone as well. But the 'nets sector is not my first choice for short positions, and my reasoning is this: it is not the internet that is causing the market to go down - rather, they are an effect of general devaluation, being vulnerable thereof.
The causes of the present devaluation of our market are rooted in the NF.X -Financial Sector, and its three sub-sectors BKX.X IUX.X and XBD.X. Indeed, some would propose that DRG.X, RLX.X and (domestic demand-driven) TechStox are defensive relative to financials' and commodity/industrial cyclicals' problems with projected growth.
True, when the markets sell off, one could throw random darts (that's why shorting the broad OEX-100 and NDX-100 works) and true, excessively-valued TechStox are certainly more vulnerable to broad-based market devaluation.
Still, INX.X devaluation is an effect, rather than a cause; and without any F/A to base decisions upon, 'nets are pushed and pulled around by a herd of mostly on-line, momentum-triggered day-traders; demanding both conviction and patience for any position trader.
Good luck to you, dear lisa - AMZN's downwave extent since Tuesday has been -21% from ~95 highs to ~75 lows in three days.
-Steve |
