Drip…Drip…Drip
Kind of like
those endless rains that can saturate the Northern California coast.
The type that give you that
opportunity you’ve been putting off for months to finally catch up on some
reading.
Not especially heavy like what we saw
in late March and early April in tech.
But just a steady stream of water with
very little letup for days.
The Naz was unable to cobble together
more than two up days in a row for the fifth week.
Something that stood out was the lack
of overpowering volume in the Nasdaq.
Some may say that until volume
climaxes on the downside, there will be no bottom.
That’s preferable, yes.
But not entirely necessary.
Some bear phases wear
people out of the market, as opposed to jolting them out en masse.
Too, flexibility in one’s thinking has
probably never been more important as in the past three years in the market.
Holding to firm beliefs about
historical measures of valuation, momentum extremes, sentiment extremes, etc.
cost many a player, particularly since ’98.
Thus, I would remain alert and
flexible.
Friday’s feature in the bells: Corning
(
GLW |
Quote |
Chart |
News |
PowerRating), which, along with EMC
(
EMC |
Quote |
Chart |
News |
PowerRating), had held up better than others of
its ilk.
GLW not only took out Wednesday’s low,
but also its prior short-term low of three weeks ago…as well, the stock
decisively closed south of its 50-day for the first time since late May.
Of course watching this happen in
“Glue” doesn’t really shed any new light on the near-term outlook for
the growth sector, or the Naz in general.
Its action was more of a confirmation
of everything going on around it than anything else.
Sort of like, “yeah, that makes
sense, doesn’t it. Right.”
Among the names, there were few
winners.
BEA
(
BEAS |
Quote |
Chart |
News |
PowerRating), though a fraction
softer, still needs to rebuild the 20% dunking absorbed earlier in the week.
Mercury
(
MERQ |
Quote |
Chart |
News |
PowerRating) put on a few
points as it stubbornly resists decline.
Judging by a few conversations I’ve
had recently, there are still some intermediate players looking to buy, buy, buy
growth stocks.
This may be wise for certain long-term
investors that have confidence in the fundamental story behind a stock.
But for traders looking to book gains
of several weeks to several months, it’s an entirely different matter.
Regardless of how a setup looks — and
there are very few lookers presently, very few — the overall market must
be either on the mend or in an outright intermediate up trend for breakouts to
follow through.
The various headfakes given by this
growth name and that growth name since the May 24 low should provide ample
evidence of the importance of market direction, and its effect on even the
sexiest of names.
Indeed this has been the most
important lesson of ’00 for the position trader.
Until the storm lets up and a new ray
pokes through the clouds, the only thing for the long-side-only position player
to do is use the time to review and learn from past mistakes.
When you’re given a lemon, you make
lemonade.