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.

Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: CommanderCricket who wrote (41067)	3/30/2005 1:03:06 PM
From: kodiak_bull	Read Replies (2) \| Respond to of 206322

Commander, "Capitulation" would be a technical term, am I correct? What is it about today's modest selloff that makes you think it's a capitulation? Capitulations always have a few major aspects to them: first is big volume, second is big ugly candles, and third is panic selling. Panic selling happens when people have given up on stocks ever bottoming out. Folks then, in a world of pain, scream, "get me out at any price. Just get me out." When all the sellers have left, and no one but holders and buyers are left, you have capitulation. When I survey this landscape I see none of the 3 necessary elements for capitulation. Looking at KCS for example, volume is actually falling a little bit, the candles are normal sized and people are talking about buying, not selling. The fact that you are talking about this being a bottom is almost clear evidence that it could never be the bottom. Fear rules at bottoms. The chart suggests that KCS could continue downward, not without relief rallies, though, for quite a while. All speculators should make a note to themselves: for stocks to make a capitulation bottom, even YOU must have doubts about them ever rising again (look at RRI several years ago), even YOU have to feel that what you are doing is a risky trade. You won't be immune to the emotional upheaval of the marketplace. You will have to buy when it seems crazy to buy to catch a capitulation bottom. From a technical point of view, of course, it is safer not to call any bottoms, leave that first 10% of the move to the bold and brave and simply recognize a that a bottom has occurred a dollar or so ago, and set up to buy on dips, and aggregate positions on a rise. Kb Edit: I have a scanning tool that shows me sector breakouts to breakdowns. I like to use its raw data to see what the market seems to be doing. Today, there are 21 sectors breaking down on a 20 day range compared to 4 breaking out. Very bearish, 5:1 breakdown ratio. Even more interesting are the sectors breaking out, very weak sectors: toys, toys & hobby stores, sporting goods, and Food Wholesale. Those breaking down are too numerous to list but they include: Oil & Gas drilling, oil & gas refining, shipping, air services, oi & gas pipelines, Energy (supersector), major integrated, independent o & g, small tools, metal fabrication. So, all of energy and other major heavy duty sectors are breaking down, and it's only toys and wholesale food breaking out. FYI&F, Kb