What saved DELL and many others?
I guess the Greenspan/Rubin rate cuts. They appear to have been created in a hurry going into a weekend that looked to be ugly. Did they saved the over-leveraged banks and brokerages? Maybe. Anyway, the ensuing rally has been one of the best that I have seen. Buy signals everywhere as most believe a crash has been averted and major bottoms have been made.
P&F tracks supply/demand. If you follow the discipline, you are into good stocks in good sectors, and enjoying the ride back up. Note, p&f doesn't say the worst is over -- it says people think it is over. And that may be enough.
Anyway, best not to fight the p&f signals, as the BP indicators seem to be early enough to be useful. As Tom Dorsey says, play the hand you are dealt. We are also approaching the third year of the presidential election cycle, almost never a bummer year.
As for DELL, if fundamentals are weakening for DELL or the sector, new p&f signals will be forthcoming. I just looked at the long-term TA's, including stochastics, money flow, on-balance-volume. While stochastics aren't strong, they aren't down-and-out ugly either. And both money flow and OBV look OK. Seems premature to say it's over for DELL, but many long-term support lines were violated. If money flow weakens from here, we may be entering a trading range. Time to buy weakness and sell strength?
Appreciate your comments here and on other threads.
Dennis |
