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.

Technology Stocks : Jimbo's Playhouse/CPQ -- Ignore unavailable to you. Want to Upgrade?

To: Mao II who wrote (1746)	6/2/1999 12:53:00 PM
From: Kenya AA	Read Replies (1) \| Respond to of 12662

M2: Remember a few days ago I mentioned O'Neill's theory on spotting ends to corrections to you? Coincidently, in today's IBD, there was an article about just that. On identifying bear markets or corrections: If the market has been in an uptrend, look for distribution days that presage a breakdown into a bear market or correction. A distribution day occurs when a key index declines on higher trading volume than the prior session. A series of such days signal selling en masse by mutual funds and other big institutions. The NASDAQ composite, which is filled with former tech leaders, has shown the most signs of institutional selling. It has posted 14 such days in the past 2 months - 6 days before the last closing high on April 26 and 8 more since then. The S&P 500 and DJIA have also joined the selling. Those benchmarks have posted 12 and 7 distribution days respectively, since the end of March. On identifying the end of the correction: Don't get so fixed on spotting the downtrend that you may miss the next uptrend. Despite the NASDAQ's 2.43% loss in heavier volume last Tuesday, it remains above the April 14th low . If a rally is genuine, 4 to 7 seven days into the advance the index should post a one-day gain of 1% or more on an increase in trading volume over the previous day. With that confirmation signal, you could start searching for new leaders that are breaking out of consolidation patterns. The NASDAQ staged a snapback rally on May 26th. To stake a claim to credibility,it still has 2 days in which to carryout a follow-through day. Follow-throughs after the 10th day indicate that a rally may be weak. Follow-through days are among the most reliable indicators of a fresh uptrend. In fact no major uptrend has occurred one. But they can send false signals. So when you buy,be sure to use disciplined stops. Looks like today won't be the confirmation day, but we still have tomorrow. <ggg> K