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Strategies & Market Trends : Groundhog Day -- Ignore unavailable to you. Want to Upgrade?

To: Jorj X Mckie who wrote (5731)	9/9/2002 9:12:13 PM
From: MulhollandDrive	Respond to of 6346

....hold your cash.. Tuesday, September 10, 2002 Strong Bull Market Has Breakouts That Succeed BY CRAIG SHAW INVESTOR'S BUSINESS DAILY The past two Corners covered two traits of an authentic bull market: strong index gains on heavy trade after the follow-through, and a teeming new-highs list. Last but not least, a bona fide rally features many top-quality stocks breaking out of bases. Instead of treading water or reversing, these stocks will keep forging north. The real winners may vault 20% in a week or two. A follow-through day gives you the green light to buy stocks. But they must be the right ones. Don't jump into any stock you see just to join in the market rally. Wait for those with top-notch fundamentals and technicals to clear their pivot points on surging trade. Sometimes this will happen right away after a follow-through. Other times, stocks won't start moving in bulk for at least a few weeks. That's why it's so important to monitor the market during downturns. The best stocks use these declines to shape bases. When the market turns, they shoot ahead of the pack to new highs, often within days. If you're ready with a watch list, you won't miss out on the big winners. Keep an eye on not only the stocks you buy, but also all the market's breakouts. If they're holding above their pivot points or gaining ground, the market's looking good. A raft of bad reversals is a glaring danger sign. The S&P 500 followed through on Dec. 14, 1994, jumping 1.1% in heavy volume three days after bottoming. Savvy traders had their eyes peeled for breakouts. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- They didn't have to wait long. Seven days after the follow-through, Integrated Systems, a designer of software for microprocessor makers, busted out of a seven-week consolidation (see table above). The next trading day, supermarket chain Safeway joined the ranks of breakouts. More stocks followed. Even better, several breakouts took off like rockets. Integrated Systems surged 35% in a month after clearing its pivot. Laser lens maker II-VI Inc. (IIVI) zoomed 36% in three weeks. These stocks went on to mark gains of 186% to 1,486% from pivot to peak. Compare that with the rally that began in late July this year. A dozen or more top-rated stocks cleared bases in the first several weeks of the rebound. But few ran up more than 10%. And within a couple of weeks, the majority had slumped below their pivot points. That was your first sign the market wasn't ready to mount a sustained rally. A series of distribution days soon proved the point.