Jaime,
As far as the markets are concerned. The CPQ announcement was no surprise to anyone. Another poster on this thread summed it up pretty well by indicating that the stock has been under pressure for a while. Personally, I don't follow CPQ but I would imagine with Friday's announcement and the fact that the price is already down considerably, CPQ may actually be closer to bottoming out here. I think Monday the stock will go down for obvious reasons but as a trader I would keep a close eye out for any reversal here. The real question I think we are all asking ourselves is whether or not CPQ's announcement, by itself, is enough to reverse the bullish run we've seen the past two weeks. Again, many will find their answer in the deteriorating market internals. However, I think to tilt the odds in your favor you have to take a look at the market from as many angles as possible. We know what's happened to CPQ. But what is the rest of the market telling us here? I think the best place to start is to look at where we are currently. The DOW, NAZ and S&P have clearly broken into record highs after months of consolidation. We have a handful of the major players in each index that have already broken into new highs, while many more are attempting to break through congestion areas. The trannies and the RUT are also in heavily congested areas. To build a solid platform under this bull run these two remaining indexes need to rally in a big way. Therefore, I have to believe that their charts will have much more of an impact on the direction of the market than the OBVIOUS break in CPQ's price. Besides taking a good look at the companies (charts) that make up those indexes. After spending some time this weekend doing that, my personal opinion is that this bull run is not over yet. Of course we may see some temporary weakness Monday morning but when the dust settles I fully expect prices to continue their advance. When I look at the small universe of stocks that I follow, I see prices that have already broken out or are very close to doing so. Plus look at the move in the RUT and Trannies on Friday. If these two indexes begins to breakout, it should make all of us question how high we can go from here. Consider if you will the the appreciation in prices already seen by AOL, AMZN and WCOM (which by the way are still pointing higher). While stocks like T, IBM, INTC, are just beginning to challenge key resistance on their charts. Who know's how far this rally can take us before our next correction. Unfortunately for us no one has that answer. Looking at what we have on the table so far tells me that this rally is not over yet.
Higher we go.
SO |
