A Pivotal Point

  • October 30, 2001
  • Tim Truebenbach

Thank you all for your kind words leading up to
my much-needed vacation. Since
the market was in “buy-mode,” to my wife’s displeasure I took along
my laptop in order to keep track of any viable breakouts. The real vacation
began when the phone lines went dead on Wednesday through Saturday morning and
the islands were completely cut off from the outside world!

Needless to say, it appears that I did not miss much. I am back now, and the
Bear is trying to make its presence felt as well. The major averages are trying
to confirm what the failed breakouts have been pointing to for weeks. So far,
I’ve counted three distribution days in the past nine trading days. We are well on
our way.

St. Jude Medical
(
STJ |
Quote |
Chart |
News |
PowerRating) is today’s
“poor performer” and the most recent
breakout to get knocked back down.

Taro Pharmaceuticals
(
TARO |
Quote |
Chart |
News |
PowerRating) is having difficulty with its breakout from last
week. This should not be surprising, since volume was not close to where it
needed to be during the breakout. 

Investors got nicely whipsawed in Krispy Kreme
(
KKD |
Quote |
Chart |
News |
PowerRating) last week as the stock broke out on substantial volume and then reversed
intraday, only to close negative.

Bradley Pharmaceuticals
(
BPRX |
Quote |
Chart |
News |
PowerRating) has been one of the few success stories of
this market. The stock broke through its pivot of 10.76 on 10/25 and has managed
almost a 30% rally! Naturally, most investors are probably wary to trade such a
cheap, thin stock — and that may be helping fuel the rally as people change
their minds. 

Multimedia Games
(
MGAM |
Quote |
Chart |
News |
PowerRating) is another successful breakout, despite the
fact that volume came into the move after the initial breakout day.

At this pivotal point in the market, it will be interesting to see if we can
stabilize and find strong growth companies setting up, or if the general market
will take over with further evidence of distribution. As things unfold, I will
be addressing this on Thursday.

Tim