Posted 24 January 2007 - 09:30 AM
many good short term opportunities for swing trading these days....that do not require predictions such as you are making. [/quote]
Thanks for the comments. My stockcharts.com seems to be down right now so I can't access my charts so it's a little difficult to show my trends. I will say that I tend to break the index down into sectors and judge the collective. The semis, by proxy have been failing for more than a year. The individual sectors in order of design to equipment installation have broken down one by one in the order they should. Even the strongest sectors such as wireless can not make new highs. Many of the such as ADI or MXIM are still down more than 30% from there highs. BRCM and MRVL from the wireless networking group have also broken down and even TXN, the blue chip of the group is still off 20% and trending lower. No need to explain the PC related stocks. You only have to look at INTC and AMD (AMD was my most profitable short this year from 41 to 17.50) The SOX have been pounding the support area of 450 for some time and I expect it to finally break through after all the earnings are out.
This explains 19% of the NDX in it's raw representation. But moreover it shows the pressure from customers being squeezed by margin erosion due to decline sales even in the consumer electronic market. I've said in the past that when we develope more toys than productivity tools we're in trouble. The semis are the canary in the mind. Even when it comes to China and India, American semi companies are now having to compete with local developers, who in turn supply the computer manufactures there, who are the largest in the world. These companies are not listed on the NDX.
Next is the Internet sector or another 8% of the NDX. GOOG is the only one out of the group that has made new highs. AMZN, EBAY, YHOO, and most others have been cut in half and are still long term trenders lower on any chart. The bricks and mortor retailers are showing their strength, so while the competition heats up in the retail sector, web margins go down.
These are some of the senarios I look for. There are numerous examples of the same nature and the charts of the individual sectors show the story, as does the longer term summation.
Hope that helps. Good choice on your longs for the past 3 years.
My opinion isn't worth the HTML it's written on