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 (36746)	4/12/2002 3:40:22 PM
From: Johnny Canuck	Read Replies (2) \| Respond to of 68228

[madtrader] Fri Apr 12, 9:47am PDT Market Someone asked me why am I so bullish here. With VIX still low, the Street doesn't believe there is sufficient panic out there. I guess he doesn't own IBM, GE, AOL, TYC, etc. These aren't the dotcoms or even the highflying tech names. They are institutional blue-chips. And there are tons of institutions out there licking their wounds right now. They are really stuck in a situation that is tough for them to play this game. Bond yields are low, and with the prospect of improving economy, no manager wants to be stuck holding long term paper. The bluechips are over-owned from all that indexing in the 90s, and they are not the source of positive earnings announcements. Small and mid-cap stocks have been in a bear market since 1998, and have done their time building a great base, so they are where the real action is right now. But these names tend to be too small and not liquid enough for the big boys to play. So, despite the pounding the large cap names have taking recently, the broad market is quite healthy. It is easy to be clouded by the major indices and think we are still stuck in a bear mode. The reality is we are not. I spent a great deal of time last night going through money flow levels relative to stock prices. Almost without exception I found positive divergence in money flow verses stock prices. What it means, is that the level of stock prices right now does not match up with the amount of real selling. In other words, the relatively steep drop in stock prices was caused by lack of bids. As Bob Pisoni of CNBC likes to report, a buyers strike. When this happens, prices eventually have to go up. Aside from that, it is also very clear to me that key names like MSFT is showing signs of exhaustion in selling and starting to form what's called a falling wedge pattern. This is a bullish pattern. Of course, I am finding the same pattern in NDX, SOX, BTK, SPX and DJI as well. With oil "crisis" abating, and the Middle East situation finally getting the attention of the White House, I am expecting a rally next week. Regardless which side you are on in regards to the Middle East situation, even the most determined will admit that at least a short term truce is near. With the current zero sum game, it is also a political death trap for all that's involved. Once all the short term obstacles are removed, the market will get back to the business of earnings. I doubt very much the upcoming earnings season will be as bad as some are anticipating. Especially in light of the fact we have already had some large blowups, and the market is mentally prepared. none. rumordude.com