Swabbing The Decks

July 24, 2000
Greg Kuhn

Despite its general lack of progress,
the Nasdaq Composite’s price-and-volume interaction continues to exude a healthy
tone.

Volume increases on up days, and
decreases on down from the day before. An intermediate-term trader couldn’t ask
for a better picture.

But if the market had an actual human
brain, it might be thinking, “If I’m supposed to feel so good, then why do I
feel so bad?”

Of course, what I’m referring to is
the bifurcation among stocks that are working and those that aren’t. In some
cases, two similarly aligned stocks, in terms of RS ranking, EPS ranking, industry
group performance (sometimes from the same industry group), and basing pattern,
etc… have acted very differently. One breaks out and follows through, the
other breaks out and nosedives back into its basing
pattern.

I make no excuses for Mr. Market these
past several weeks. He’s just a cranky old salt. Was way too far out to sea
earlier in the year, met Mr. Tidal Wave — just swabbing the decks now. And who likes
thankless detail work anyway?

And the base-building process in the
market goes on, and on, and on. Stay with the stocks working for you here, part
company with those that aren’t. Beware of over-analyzing each situation, and
don’t try to read too much into anything.

Going from bright spot to sore spot,
Varian
(
VARI |
Quote |
Chart |
News |
PowerRating) did an about-face Thursday on huge turnover. That was
distribution, and the opposite of what a stock should have done, following
Wednesday’s strong, upside reversal.