Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Mu Gamma Lambda -- Ignore unavailable to you. Want to Upgrade?

To: Rich1 who wrote (680)	6/15/2001 7:40:10 AM
From: Rich1	Respond to of 10077

Kind of like closing the barn door after the cows get out but this has me convinced we are going a lot lower... Top of Report Everyone's Favorite Qqquestion: an NDX Update Over the past few weeks we have seen our short-term indicators for the OTC gradually reverse down, one by one, and we have been recommending a handful of short ideas in the aggressive trading section of our Daily Equity Report (The Trader's Corner). Many of these ideas have been NDX-type names (large-cap tech), so it seems appropriate to post a brief update on that index, especially after the bludgeoning last few days on the Nasdaq. Below we have included the current charts for the Nasdaq Non-Financial Index (NDX) and Nasdaq-100 shares (QQQ), as well as comments on recent activity. A key observation after the past few days is that the daily distributions for each of these vehicles is close to oversold levels. This is a very near-term look at the large-cap technology universe, but still valid for those trying to gauge entry points for short positions. Having seen key breakdowns on the NDX, but the daily distribution nearly oversold, short positions may best be considered on slight rallies from this point. Here's a look at the NDX distributions. Daily Distribution Table \| + \| + + \| + + \| + + * + + \| + -------\|---------------------------- 1693.66 1867.81 2041.96 Weekly Distribution Table \| + + \| + + \| + + \| + + * + + \| + --------------\|--------------------- 1329.87 1830.27 2330.66 Even after an impressive rally off of its lows, the NDX components still pose some ominous technical attributes. Looking at the table below, we see that 5 of the top-10 weighted stocks underlying the NDX, are in an overall bearish trend, while two are very close to violating trend lines after yesterday's action. As well, the longer-term relative strength picture remains skewed toward sell signals. In all, the longer-term picture for these components, which comprise nearly 40% of the risk, is on anything buy solid footing. Nasdaq Non-Financial Top 10 Weightings Symbol Name WGT % Trend RS Dow RS Column MSFT Microsoft Corp 11.032 % Positive Sell O INTC Intel Corp 5.751 % Negative Buy O QCOM Qualcomm Inc 4.129 % Negative Sell X CSCO Cisco Systems Inc 4.032 % Negative Sell X ORCL Oracle Corporation 3.023 % Negative Sell O AMGN Amgen Inc. 2.832 % Positive Buy O DELL Dell Computer Co. 2.116 % Positive Sell O VRTS Veritas Software 2.095 % Positive Sell X MXIM Maxim Integrated 1.960 % Positive Sell X SUNW Sun Microsystems 1.948 % Negative Sell O * VRTS and MXIM are very close to trend line violations [NDX] Nasdaq Non-Financial Index ($1713.10): The NDX is had a key break at the 1750 mark in trading action yesterday, a critical level on its chart that breaks a triple bottom and moves the index to a near-term sell signal. The QQQ's have given the sell signal on their chart in early action Thursday morning as well, and trend remains negative in both cases with the NDX having shown a lower top right at the bearish resistance line. Based on a daily distribution, the NDX will be oversold in the 1690-1700 range, so the immediate downside may be limited on the breakdown, telling us that aggressive traders may think to lock in some quick gains on short positions today if we move much lower. Ok to consider using triple-witching volatility to provide higher prices at which to attain better risk-rewards for new short positions initiated upon this breakdown. In all, the NDX and QQQ pictures continue to deteriorate, and a move to 1700 will break a spread double bottom and open the door for a test of next support at 1350. Trend Chart -- Nasdaq Non-Financial (NDX) 3000- * --* ----\| ------------------------------------------------- 2950 * X * \| 2900 X O * \| 2850 X X O * 2800 X O X O \| * 2750--X O X O --\| --* X --* --------------------------------------- 2700 X O X O \| X O X * 2650 X O O \| X O X O * 2600 X * O \| X O X O * 2550 X * O \| X O 2 * 2500--* ----O X \| X --X ----O ------* ----------------------------- 2450 O X O X O X O * 2400 O X O X O X O X * 2350 O X O X O X O X O * 2300 O X 1 X O X * O X O * Top 2250--------O X O X O X * --O X O ------------* ------------------- 2200 O O X O * O O * 2150 O X * O * 2100 O * O X * * 2050 * O X O X * 2000------------\| --------------O X O X --------------X O * ------- 1950 \| O O X O X 5 X O 6 * 1900 \| O X O X O X O X O X O 1850 \| 3 O X O X O X O X O 1800 \| O X O X O O O Med 1750------------\| ----------------------O X --X O ----------O------ 1700 \| O X O X 1650 \| O X O X 1600 \| O O X 1550 \| O X 1500------------\| --------------------------4 X ------------------- 1450 \| O X 1400 \| O X 1350 \| O 1300 \| Bot 1250------------\| ------------------------------------------------- [QQQ] Nasdaq-100 ($42.00): The broke a spread triple bottom at $44, and in one fail swoop broke a spread double bottom at $43 to violate all near-term support on the trend chart. The Q's remain in an overall downtrend and give this most recent sell signal after failing against the bearish resistance line. Next support is now at 34 on the trend chart, while the index is close to oversold levels on its daily distribution. Those looking to initiate short positions from this point will find a better risk-reward on a rally to initial resistance at 45, close to the middle of the 10-week trading band. Weekly momentum has just flipped negative for the QQQ's as a trading vehicle. Those initiating short positions on a bounce may maintain a stop loss of $50, a violation of the bearish resistance line. Daily Distribution Table \| + \| + + \|+ + +\| + + * + + \| + --------\|--------------------------- 41.29 46.74 52.19 Weekly Distribution Table \| + + \| + + \| + + \| + + * + + \| + --------------\|--------------------- 32.52 45.72 58.92 Trend Chart -- Nasdaq-100 Shares (QQQ) 75 * ----\| --------------------------------------------------------------- 74 X * \| 73 X O * \| 72 X O * 71 X O \| * 70 X O --\| --* ----------------------------------------------------------- 69 X O \| * X * 68 X O \| * X X O X * 67 X O \| X O X O X O * 66 O \| X O X O X O * 65 --O --\| --------X O --O X 2 ----* ------------------------------------- 64 O \| X X X O X O * 63 O \| X O X O X O O * 62 O X \| X O X O X O * 61 O X O X O X O O * 60 --O X O X O X ----------* O X ------------* --------------------------- 59 O X O X O X * O X O * Top 58 O X O X O X * O X O * 57 O X 1 X O X * O X O * 56 O X O X O X * O X O * 55 --O --O X O X * ----------O --O --------------------* ----------------- 54 O X O * O * 53 O * O * 52 \| O X * * 51 \| O X O X * 50 ------\| ----------------------O X O X ----------------------X O * ----- 49 \| O O X O X X X X O X * 48 \| O X O X O X O 5 O X O 6 O 47 \| O X O X O X O X O X O X O 46 \| 3 O X O O X O X O X O Med 45 ------\| ------------------------------O X ------X ----O X O --O --O --- 44 \| O X O X O O 43 \| O X O X X O 42 \| O O X O X O 41 \| O X O X 40 ------\| ----------------------------------O --O X --------------------- 39 \| O X 38 \| O X 37 \| 4 X 36 \| O X 35 ------\| --------------------------------------O X --------------------- 34 \| O 33 \| Bot 32 \| 31 \| 30 ------\| --------------------------------------------------------------- Printed from todays DWA Big Report...