Conviction
It was all there.
The solid volume.
The buying in the glamours, the bells,
and some tertiaries.
The gap opening in the Naz that was
never tested, with a good finish.
Obviously, this is the type of action
we need to see to again take the market seriously and move off our heavy cash
position.
There are two problems for the
intermediate trader that should prevent him or her from getting too excited at
this point, though.
First, the intraday low of the rally
was just one day ago.
Second, there aren’t enough bases
worthy of attention at this juncture.
Otherwise, it is hard to ask for a
better day for the bells than Thursday.
Nearly every one was up a minimum of
6%.
As for the semis, I don’t remember an
upday as monstrous as this, the biggest since at least ’94.
True, they have been beaten down and
their trend, both short- and intermediate-term, remains down.
But the sheer power behind the move —
17% surges don’t normally occur in a bear market rally, but rather a bull market
advance — is most encouraging.
Among the names, Aeroflex
(
ARXX |
Quote |
Chart |
News |
PowerRating),
which broke out of a seven-month base on volume Monday, showed very good
follow-through Thursday.
BEA
(
BEAS |
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Chart |
News |
PowerRating) stood just above the
lip of its eight-month base
Comverse
(
CMVT |
Quote |
Chart |
News |
PowerRating) blew to a
seven-month high on big turnover.
McData
(
MCDT |
Quote |
Chart |
News |
PowerRating), a recent IPO, has
practically doubled over the past seven outings.
Mercury
(
MERQ |
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Chart |
News |
PowerRating) completed a
head-and-shoulders top.
Veritas
(
VRTS |
Quote |
Chart |
News |
PowerRating) is showing good
structure.
Now is the time to have your watchlist
ready if this rally follows through in ensuing days on convincing volume.
One need only look at how quick the
Nasdaq market turned in the April 29-May 5 rally, when scores of growth names
completed the right sides of their bases in a matter of days, to know that
bottoms — if that’s what this is — form far quicker than market tops.