Of Drummers & Mire

By all accounts,
a motionless day.

Beneath the surface, the glamours
showed decent tone, up three to two.

 

Tuesday’s highlights: another round of
markdowns in the semis and another round of markups in the bios.

In a sense, Tuesday’s tape was a
microcosm of the current market — healthcare vibing to the beat of its own
drummer and tech wallowing in its own mire.

Otherwise, I’ve repeatedly mentioned
the importance of follow-through subsequent to breakout.

It’s the third component of a winning
stock’s price action.

Base, breakout, follow-through. Base,
breakout, follow-through.

Starbucks
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Friday broke out
of a seven-month base on thick volume…its lack of follow-through Monday and
Tuesday is just another example of the less-than-obvious conviction permeating
through much of the market.

At least the market that counts from
the standpoint of the aggressive position trader.

Along these lines, JNI’s
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follow-through was halted, if only for a day…the stock is one of the more
interesting ones to watch from the standpoint of sentiment.

If tech was riddled with setups that
look like that of Speechworks
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, there would be scant doubt that The
Launch was imminent.

Among the names, Pivotal
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,
showing some nice accumulation over the past three weeks, is one of the
better-looking Nets.

For all its hype, Palm
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is
another that’s benefiting from institutional buying during the past four weeks.

Remember, now is the time you should
be on the lookout for "new names."

Stocks that you’ve never heard of
before.

Speechworks is an xlnt example of
this.

Merely focusing on the former flyers,
such as Newport
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or Glue
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or Network Appliance
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,
misses the point.

The point being that leadership
usually changes from one cycle to the next.

With that in mind, you will severely
limit your ability to bag some of a cycle’s big winners by training your
attention solely on the last cycle’s champs.

The most successful medium-term
players make it a habit of always staying in tune to the whims of fashion.