To: Lee Lichterman III who wrote (13138 ) 7/26/1998 2:12:00 PM From: Robert Graham Read Replies (1) | Respond to
As long as key stocks and indices stay above significant support there will be some time to think. The market rarely does not give clues before and during a market move, in this case a market top that has lead to a sell off. There is usually enough time for the observant to look for signs of what is to come. I would use key MAs and support as a guide, along with a read on how quickly the technicals are deteriorating. A good time to get evidence of the technical damage of the market is when the market attempts to rally. Are important resistances respected? Is volume dropping as the market continues its rally? How far was the market able to move up before turning back down? What stocks participated in this rally? When the market turns back down, what is the technical improvement derived from the rally, if anything significant? Is important support respected on the move back down? When does buying come back in? What stocks participated in the second move down and how does this differ form the group of stocks sold on the first leg down? If the technicals remain intact and are improving on the ride up, then I would be looking for signs the market is bottoming on its move back down. There are many way to slice and dice an analysis of the market during this time. However, the volatility we will see can be deceiving if you do not have a way of filtering out the extraneous noise that market action can provide the observer.
