Market Gems:Stocks w/Strong Earnings and High Tech. Rank Message Board

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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank

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To: john rieck who wrote (41892)	5/26/1999 8:34:00 AM
From: WaveSeeker	Read Replies (1) of 120523

In these situations, I usually buy end-of-day then sell the gap. In a down trend, these kind of markups are usually opportunities to reshort. And as long as this market is in a downtrend, it makes sense. But one of these days there will be a sharp reversal and the shorts will get caught. Even today, I was not considering selling the gap but instead putting a stop loss at yesterday afternoon's entries. This Nasdaq pattern seems to repeat itself over and over again - a week that closes on its low with the decline accelerating the following week, forming a "V" pattern the latter week. But typically if the reversal does not occur by end-of-day Thursday, then it's a bad sign. Two examples where the market did NOT reverse sharply were July 1996 and September 1998. The concern this time is the so-called technical "damage" with stocks breaking their 50-day moving averages. But the fundamental knowledge of low interest rates makes this pattern a superior buying opportunity. With the S&P futures up 8.5 this morning, shorts may decide that this is the day to cover.

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