Another Day, Another Low
The Comp made a new low for the bear
that began March 10, its top-to-bottom drop now coming to 45%.
This is about what the S&P did in
what many referred to as the "devastating" ’73-’74 bear.
It was also the fifth distribution
session in the past 11.
Merrill
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wash-and-rinse day, finding support at its 200.
Other bells didn’t generate notable
activity.
Of course, given its 99% correlation
to the S&P over the past five yrs. or so (per Stephen Shobin), GE
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another bell that can be watched.
It’s acc/dist score is 1-3 over the
past nine days.
Filenet
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most constructive charts in the growth sector.
At this point, the intermediate player
should be watching for those growth names that show a shift from a lower
high/lower low progression to a higher high/higher low sequence.
That will be your first sign that the
trend has changed in a particular issue.
Even then, there will still need to be
extensive base-building work done to the right sides of cups before the market
presents low-risk entries in the growth sector.
Immediately after, or in the midst of,
a big sell-off is when I find the RS line of most benefit.
This tells you at a glance exactly
where the outperformers are.
And so in addition to noting trend
changes, you should also be watching those RS lines.
For instance, Cisco
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though still in a downtrend, saw its RS line bottom just over three weeks ago,
unlike any other bell.
So there’s your first inkling of
leadership in the bells.
Moreover, you can also watch to see
what stocks are making a higher low in the wake of Tuesday’s marginally lower
low in the Naz.
However, the RS line accomplishes that
same purpose, and in a more precise manner that may be measured against other
shares.
Some of you who began trading this
year or last, and who also have been regulars to this space, recall my speaking
of the same sequence of events last spring.
Hopefully, practice makes better, and
you will be wiser and better-prepared to analyze what’s going on in the next
advance.