>>The problem I have with just about every stock is that I don't see any reversals starting yet (and really didn't expect to). <<
Seems like a lot of people feel the same way. Although I feel we hit bottom on friday.
decisionpoint.com
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Lastly, there is one technical indicator that has been so amazingly accurate for many years that is on the verge of giving a major buy signal. The indicator was developed by Richard Arms--appropriately named the Arms index. It simply measures the ratio of the volume expended on the upside versus the downside, and then compares that to the advance decline ratio. For the vast majority of times this indicator is not all that significant, but about once every 4-6 years, the 10-day average of the Arms index moves above 1.5. When that has occurred, without exception in the 9 times in the last 30 years that it has occurred, it has always meant that a major bull-market would begin in the following two weeks. This is the indicator that was the final piece of evidence to me on August 9, 1982, which prompted me to write the most important report of my little career, in which I stated that within the next two weeks one of the strongest bull markets in history would begin. Surely enough, on August 17, 1982 the upside explosion occurred, kicking off the 16 year bull market. This will be very significant to us if it occurs, since we have been expecting a very significant super-cycle bull market to be kicked off in the next 18 months with a totally different "growth" personality. We haven't expected it to occur this soon, but we will listen intently to the message of the Arms index for a clue in the days ahead.
It is not there yet, but yesterday the 10-day average of the Arm index moved to 1.443. If today's daily input of the Arms index should close today at 2.365, that would once again give one of those very rare signals that a major BUY opportunity is within the next two weeks. Remember, there might be more damage, but the damage should be viewed with excitement.
wheatfirst.com
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Banks (BKX). This index is IT oversold and at the bottom of its IT regression channel. At 662.58 it is down from a high of 933.40. First foreign loan exposure, now derivative fears have been priced into these stocks. This is now the most compelling IT/LT sector of the market. It may be too early to buy, but it's not too early to start making out a shopping list.
If you are tempted to go bottom fishing be aware that for most stocks I'm watching, a continuation of their rallies would result in a V shaped bottom. I don't like, trust, or buy V shaped bottoms. Wait for a W shaped bottom.
If you are a truly long term investor, the financial stocks are probably a good buy here. American Express (AXP), Bank Boston (BKB), Citicorp (CCI), Chase Manhattan (CMB), Fannie Mae (FNM), First Union (FTU), NationsBank (NB), Norwest (NOB), and Travelers (TRV). But I know that even if you think you're a long term investor or not, in truth you aren't. How do I know this? Because "real" long term investors don't read advisory columns like Nick's Picks. So, DON'T buy any of these now. Wait for a retest of the lows.
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