Pearly Whites
This morning I mentioned that pre-market action like we saw
always puts a big smile on my face. Extreme price and volume action like what we
were seeing was simply unsustainable. I then listed several names which I was
watching to turn around.Â
Ciena
(
CIEN |
Quote |
Chart |
News |
PowerRating), down 7. Covad
(
COVD |
Quote |
Chart |
News |
PowerRating), down 5. Copper
Mountain
(
CMTN |
Quote |
Chart |
News |
PowerRating), down 17. Cisco
(
CSCO |
Quote |
Chart |
News |
PowerRating), down 2.31. Applied Materials
(
AMAT |
Quote |
Chart |
News |
PowerRating),
down 2.38. Oracle
(
ORCL |
Quote |
Chart |
News |
PowerRating), down 2.3. Yahoo
(
YHOO |
Quote |
Chart |
News |
PowerRating), down 3. Juniper
(
JNPR |
Quote |
Chart |
News |
PowerRating),
down 13. PMC-Sierra
(
PMCS |
Quote |
Chart |
News |
PowerRating), down 7.13. i2
(
ITWO |
Quote |
Chart |
News |
PowerRating), down 15.
What I was then watching for was similar chart formation to that of the Nasdaq
futures and the other indices.
No complex mathematical formula was needed to see the reversal. As I mentioned
in my speech at the Venetian, my greatest scanning mechanism is my eyes.
The action in the names I mentioned this morning was classic and textbook.
The following are all five-minute intraday charts from
Wednesday.
The e-mini S&P futures were lock-limit down, and the market
was halted. This gave us a resting period and a moment to prepare for a
reversal. If you missed the reversal off the bottoming formation, a trade could
have been made on the move above the morning high.
Ciena
(
CIEN |
Quote |
Chart |
News |
PowerRating) was a clean reversal. A bottoming price bar formed 15 minutes
into the session.
Cisco Systems
(
CSCO |
Quote |
Chart |
News |
PowerRating) mimicked the action of the futures contract and the
broader market. This is one of my favorites to trade.
PMC-Sierra
(
PMCS |
Quote |
Chart |
News |
PowerRating), a favorite of many, drew a similar chart.
Sun Microsystems
(
SUNW |
Quote |
Chart |
News |
PowerRating), a liquid name like CSCO, is
another favorite of mine to monitor for reversals.
While I do not know where we will close, I am happy with the
action already. Is this the bottom? Is this the capitulation that everyone was
waiting for? Ask me in six weeks. Short-term traders should not concern
themselves with this, and continue to focus on the day-by-day action.
As for myself, I am done for the day. As Lewis Borsellino would
say, “I’m off to the golf course.”
Until later,Â