14 replies to this topic

[Echo]

Hiker, I cannot disagree with anything you have written. It is clearly laid out and quite reasonable. TA allows us to gain a probability advantage over 50/50 odds or flipping a coin. Picking a number out of a hat, current TA might suggest a 60/40 or 65/35 chance that the IT bottom is in and that's good enough for some to go long fully and others to nibble cautiously acknowledging the 35-40% risk of being wrong with "bottom picking". Others might go 50% long. Each to his/her risk tolerance and those going fully long had better have stop losses in mind just the same as anyone going short here.

I have to admit a bullish bias here on my part and that may be the crux of my problem, but it is based on my belief in the TA tools I have been studying over the past few years and not just opinion.

On another note, here is another chart that looks interesting that no one has talked too much about recently. SMH:

http://stockcharts.c...0571&r=7958.png



Up 13+% this year, found support off the rising trendline and 50% Fib retrace from last July lows to the July 07 highs, broke out of strong horizontal R at around the 35.5 level in April and retested in late May and again in early June and then took off. Retested again with the mid August drop and now rising again. Above the 200 ma which is rising. 50ma flattened out and trying to rise with 20ma rising and providing support for now. If this market takes a bullish resolution, this sector might be a leader. Any bears out there might point to the obvious H&S pattern developing, but I haven't looked to see if volume is supporting such a pattern.

Best, Echo

[Darris]

Couple of other Bullish IT items that are supportive: NYSE Member buying at DP is showing net buying, and the NYSE SDOT short volume has dropped off.

[hiker]

ECHO, I must confess I was really tempted to buy SPY on Friday at the test of 145.33 horizontal..and may be sorry I did not. My habit has been to sell rallies in recent weeks toward 148.33 to 150. The proximity to the 200sma for both NYA and SPX has me on the fence right now about swing trading long...it is too close for my comfort to initiate a long, though I realize it provides easy risk management with the exception of gap downs. And the proximity to the long-term rising t/l for SPX is another lack of price confirmation that prevents me from initiating a long at the moment. yes, ECHO, I have been wondering about how the strength in both large cap tech and OSX, OIH, XLE, and what meaning it has for the rest of the market such as NYA and SPX. money has rotated to those sectors, and for how long? some of the best peformers in tech (as measured by the % distance from the 52-week high) are: not all of these tech stocks are large cap: Symbol /Pct from Yr High/ Friday's Change - - - - - ALVR Down 3.78% Down 0.27 Down 2.08% - - - - - AT Down 2.41% Down 0.10 Down 0.15% - - - - - BIDU Down 3.94% Down 6.51 Down 2.96% - - - - - CLDA Down 0.76% Up 1.26 Up 4.80% - - - - - CSCO Down 3.02% Down 0.32 Down 1.01% - - - - - GRMN Down 3.24% Down 2.01 Down 1.87% - - - - - HPQ Down 3.21% Down 1.34 Down 2.67% - - - - - IBM Down 2.81% Down 2.07 Down 1.76% - - - - - INTC Down 3.96% Down 0.68 Down 2.60% - - - - - IOM Down 3.48% Down 0.09 Down 1.60% - - - - - JNPR Down 2.40% Down 0.37 Down 1.06% - - - - - NCIT Down 2.97% Down 0.31 Down 1.69% - - - - - NOK Down 1.22% Down 0.27 Down 0.79% - - - - - ORCL Down 3.91% Down 0.38 Down 1.85% - - - - - OSTK Down 3.19% Down 0.28 Down 1.21% - - - - - SAP Down 3.35% Down 0.19 Down 0.34% - - - - - SYNA Down 2.28% Down 1.01 Down 2.28% - - - - - TEF Down 2.55% Down 0.14 Down 0.19% - - - - - TMO Down 1.99% Down 0.58 Down 1.06% - - - - - VIP Down 3.82% Down 0.79 Down 3.10% - - - - - VOD Down 3.60% Up 0.14 Up 0.43% - - - - - what Down 2.54% Down 0.25 Down 0.40% VS. top ten SMH holdings: Symbol/ Pct from Yr High/ Friday's Change - - - - - ADI Down 11.02% Down 1.14 Down 3.02% - - - - - ALTR Down 9.72% Down 0.78 Down 3.19% - - - - - AMAT Down 9.61% Down 0.54 Down 2.53% - - - - - INTC Down 3.96% Down 0.68 Down 2.60% - - - - - KLAC Down 9.29% Down 1.00 Down 1.73% - - - - - LLTC Down 12.59% Down 0.57 Down 1.65% - - - - - MXIM Down 14.92% Down 0.76 Down 2.47% - - - - - NSM Down 13.24% Down 0.82 Down 3.09% - - - - - TXN Down 10.93% Down 0.75 Down 2.08% - - - - - XLNX Down 15.34% Down 0.49 Down 1.86%

Edited by hiker, 09 September 2007 - 08:51 AM.

[arbman]

The internal low is obviously in, but unconfirmed by the new highs vs new lows, so the price low (chart with a revised upside target 1530 below) should come in before Nov, it could turn out to be a lower low. It usually does, but it really depends on an another high due in late Sep or early Oct from here. If there is another low lining up thereafter (9 month or 20 wk), it will happen after the new year in January with the initial deterioration starting in early Dec. The lowest low for the second half of 2007 should be either in or should come sometime in late Oct, but not later imho...


Here's a different perspective, now starting week #37:



Good luck,
- kisa

Edited by kisacik, 09 September 2007 - 08:56 AM.

[Echo]

Hiker, thanks. Before, I could clearly see why you might be selling R until the market proves itself and I did the same last Tues taking profits on the upside and swing trading TWM. What I was having trouble understanding was your hesitancy to go long at S, such as the 1447 horz and other reasons for support at the 1450 level and your followup post clarifies that perfectly. You follow your discipline to generally sell R in an intermediate downtrend (eg declining 50ma) and only buy S in certain opportune times until you are more confident that the IT is changed to up or we start hitting lower S levels.

We are in an "in-between" zone right now where there can certainly be debate about whether the IT trend has changed to up. Tools such as Hurst cycles, Fibs 20 and 40wk cycle lows, money flow indicators such as breadth and volume mco/mcsum would certainly require "leading off" to a certain extent to capture more of the initial move, the extent of which would depend on one's risk tolerance. Your caution is understood.

Thanks for the tech issues. It looks like the strength in smh might be mostly driven by intc at this point.

The smh chart I posted before reverted to a default format rather than the annotated one so here it is again.





Peace and good luck next week. Echo

Edited by Echo, 09 September 2007 - 12:41 PM.