To: StockOperator who wrote (39766 ) 1/3/2001 12:20:47 AM From: StockOperator Read Replies (1) | Respond to Time once again to navigate our shark infested waters. There still is plenty of bullish talk on SI. Whether investors are playing the January effect or are perhaps looking at the short term strength in the chip stocks. Many are still looking to play things from the long side. Let's dissect what the market has given us in this first day's trading to see if that action is wise. I believe a good place to start would be the Compx considering all the action is here. Todays trading printed a new lower low taking out the one set two weeks ago. We haven't yet closed below that point but tomorrows trading should put this level to rest. Even if it holds lets take a hard look at the chart. Does this index with its series of lower highs and lower lows on a weekly chart look like a bottom has been hit? Always the million dollar question. My answer of course is no. Tops like bottoms are often very difficult to forecast, but considering this downward ratcheting of prices, I don't see it. Personally I would be looking for a v-type bottom, with a strong push to lower levels. This push could carry prices in all the major players (the CSCO, SUNW and ORCL's of the world) to ridiculous levels. And then of course the all important key reversal day that is oh so lacking on charts every where you look. The other possibility of course would be a longer type bottoming action of say two to three month duration. Which is something we're not even remotely close to doing. What about the charts for the major players. Heck, if we have bottomed their charts would surely reflect that. Look at CSCO. It took out its old lows both on an intraday and closing basis. Look at the entire formation for ORCL. The top heavy, expanding pattern of the past couple of weeks has already started to break down badly. SUNW - Tomorrows trading will seriously test this fragile bottom. What about the SOX. XLNX had a weak close despite the mid day rally. The index as a whole will also be tested the rest of this week. B2B definitely in trouble. PMCS, CIEN, JNPR, HAND, JDSU could all punch into lower lows TOMORROW! What about the box makers. Just watch how things play out through this week for DELL and Gateway. MSFT, IBM and HWP??? There's big time pressure here as well. Even AMGN can't hide.
