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 (37928)	8/5/2002 10:17:56 PM
From: Johnny Canuck	Read Replies (1) \| Respond to of 68652

Trading Ideas by Dave Landry, Director of Research TradingMarkets.Com August 6, 2002 On Monday, the Nasdaq opened flat and after a brief blip up, turned down and sold off. Then after some late-morning/early afternoon drifting, it resumed its sell off. This action has it closing poorly, at 5-year (closing) lows and within spitting distance of its recent lows. The S&P, like the Nasdaq, continued to sell off hard out of a pullback from lows. The low of the VIX is now above its 10-day moving and more than 10% away from its average. In other words, it's a CVR III buy signal. This signal, which tends to lead the market, suggests we could get a bounce within the next few days. So what do we do? The market is becoming oversold as it continues to sell off out of a pullback from lows. However, it's now getting too late in the swing cycle to establish new short positions. Therefore, continue to tighten stops on existing shorts and continue to take partial profits. On the long side, (is it just me, or does that sound funny?), continue to watch the biotechs (see below). Looking to potential setups, although biotech sold off fairly hard on Monday, they still appears to be "shaping up." Therefore, you might look to play the Ishares here (either the BBH or IBB). However, continue to wait for entries just in case, in light of the poor action in the market.