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 : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (36282)	3/1/2002 5:59:36 AM
From: Johnny Canuck	Respond to of 69795

[madtrader] Thu Feb 28, 11:30am PST Market This is going to be fun to see which camp is right. Needless to say we have Rumordude on the bear camp, and I am happy to take the bull camp here. I know the bears have been using the low VIX reading to make their case for almost 3 months now. What has the S&P done during that period? Pretty much nothing, as is the case with VIX. Sure, some will say this is a ticking time bomb. With the economy doing better and not worse, I just can't see how the earnings will come out to be worse as we go on, especially when compared to very lousy numbers last year. Let's not forget, one of the oldest games on the Street is still earnings comparison. when you beat earnings, stocks go up. Why else would Enron spend so much time messaging their books? And let's not forget to check how the DJI and S&P has done since their post September peak. DJI is within whiskers of that high. SPX refused to drop below 38% retracement line, which is about as shallow as a run of the mill correction can get. The only weak area is NASDAQ or QQQ. But as QQQ gets close to 62% retracement, the last line of defense. An interesting thing happened. Key stocks like MSFT (let's not forget, it is still the largest name in QQQ) refused to roll over. And we are getting classic RSI and CCI positive divergence. Which suggests the selling momentum is receding. As tech names declines, their pull in the market shrinks as well. Which is why I said a few days ago that tech names are less relevant than the old economy cyclicals. With 2/3 of the DOW names, and the majority of S&P names outside of tech working, I just can't see how this market will tank. Although I am not at all excited by the chart of QQQ, I think it is much too late to short. Besides, let's face it. Are things worse off than in late September or better, even for tech? I think it is a no brainer that things are better. When DJI takes out this key resistance of 10200-10250, the most likely scenario is it will lift QQQ with it too. Short term, I do see DJI backing and filling around this key level, while QQQ gets stuck between teh 60% and 50% retracement line, which is between 33.25 and 35. As for the VIX, I see it going all the way down to 18-19 range. I will re-assess the landscape by then. none