Another Good Example
The Qs are off their
early lows, yet remain in an hourly downtrend as we approach midday
on what continues to be very thin trade characterized by extended periods
of inaction followed by illiquid spikes which aren’t necessarily in the
direction of the "immediate" trend. (If this were an Indy race, the
yellow caution flag would likely be out.) Of concern to the bulls may be the
inability of the SOX to escape red when the Nasdaq was making its early run, and
which remains down over 6 at midday. Of the top tier-one underlying Q stocks, Microsoft
(
MSFT |
Quote |
Chart |
News |
PowerRating) and Cisco’s
(
CSCO |
Quote |
Chart |
News |
PowerRating) strength
are helping offset weakness in the semi sector, netting a rather neutral market
thus far in the bigger scheme of things.
Yesterday was yet another good example of why
price vs. momentum divergences are merely heads-up indicators which must be
combined with the necessary trend-change trigger for those looking for reversal
opportunities. Looking at our key 13-minute chart, the trend never turned (note
the 5-MA never got above the 15-MA), which left the hourly downtrend intact for
another leg down.
Thursday May 30,
2002 12:00 P.M. ET
Good Trading!