Testing 1-2-3
May the
test begin.
That is, the Naz’s test of its prior
low at 2523.04 on Nov. 30.
Durable bottoms are usually made when
an index tests a prior low and sees its descent halted at a point just above or
just below the previous low.
Volume on the test should recede from
that of the prior low.
About the only positive to Tuesday’s
session was Nasdaq volume, which, at roughly 2.29 billion, was 16% less than on
Nov. 30.
Otherwise, unlike some recent
sessions, breadth among the growth leaders was negative, and heavily so.
Four-to-one, to be exact.
Overall, one of the clear positives of
this market is the NYSE Finance index, which appears to be consolidating its
spring-summer run-up in admirable fashion.
If the market were truly discounting a
severe recession, this index would likely
appear different.
As an example, the index sorely lagged
the general market prior to, and during, the 1990 bear market, which coincided
with the beginning of the ’90-’91 recession.
Siebel
(
SEBL |
Quote |
Chart |
News |
PowerRating), until five weeks
ago one of the leaders of the decimated growth sector, and a must-own among some
institutions, is just one of many examples of why it pays not to assume.
Ditto for Ciena
(
CIEN |
Quote |
Chart |
News |
PowerRating).
Cytyc
(
CYTC |
Quote |
Chart |
News |
PowerRating) continues to shape
up nicely.
Documentum
(
DCTM |
Quote |
Chart |
News |
PowerRating), a recent
breakout, and a rarity at that, charged ahead on dense flow.
IDEC
(
IDPH |
Quote |
Chart |
News |
PowerRating) was more typical of
recent breakouts…last week it came out of a deep, five-week base, then
failed…Tuesday it again moved to a new high before being distributed, going
out below the lip.
Shaw
(
SGR |
Quote |
Chart |
News |
PowerRating) lays claim to one of
the only sound bases in the entire growth sector.
Correction: Monday in this space, I
wrote "Within the complex, there were three winners for every two
losers…" This should have read: "Within the growth complex,
there were three winners for every two losers…"