Are You Excited Yet?
I needed to put this report out a day early because of my
schedule.
I first wanted to revisit my 5/20
report. In that report, I put out 40 stocks that
looked shortable…this after a 10% up week in the NASDAQ.
Well, two weeks and two days
later…38 out of 40 are down…and by an average of 16.3%. The biggest
loser was Genesis Microchip
(
GNSS |
Quote |
Chart |
News |
PowerRating)…down a whopping 46.02%. I mention this again because
of how much the market and these stocks stood
out. Many pundits were yelping and
screaming that the bottom was in. The charts said otherwise. I urge you
to go back to the report and study the charts.
Constant studying of charts is how
all the great technicians like O’Neil, Weinstein, Bloch, Haggerty, Landry,
and others got to where they are now.
As for the present, I have some strong thoughts.
The DOW and S&P
500 broke the support I outlined for you on
Monday. But don’t think for
a minute that they can’t bounce over those levels (DOW 9800 and S&P
500 1050). This needs to be watched.
The NASDAQ pulled up its
bootstraps right where it needed to. The oft-mentioned
SEMIS held support also. This does not mean a
bottom has been put in. This
does not mean it does not turn tail tomorrow. This means that you
lighten up your shorts. That’s it. There is nothing to buy in TECHLAND
and certainly nothing to buy in BIOTECH.
Sentiment…near-term has turned enough for a bounce. The VIX
has spiked up, PUT/CALLS
did the same…and I actually heard CNBC all day yesterday asking questions
on whether this market can be compared to bear markets that lasted
10-15 years. Gee…they are actually now
calling it a bear market.
But that’s the good. YIKES! Time for more stats.
I follow 197 groups. Only 38 of 197 of these groups are
still above their 50–day averages.
Many of these leading groups have now broken down. They include AEROSPACE/DEFENSE,
AUTOS…and all the AUTO
sub-sectors, REGIONAL BANKS, BUILDING
(CONSTRUCTION, TOOLS, HOMES,
MOBILE HOMES), CHEMICALS,
COMMERCIAL SERVICES,
CONTAINERS, GAMING, HOUSEHOLD
APPLIANCES, HOTELS,
MOTELS, INSURANCE, MACHINERY,
MEDIA, OFFICE SUPPLIES
and EQUIPMENT, OIL & GAS
(DRILLING, MACHINERY), many RETAIL
GROUPS, most TRANSPORTS and
UTILITIES.
Have I excited you yet? The technical condition is that
bad. I have no preconceived notion about what can happen from here, but it is my
contention that the only thing
that can really change the tide is another panic day like Sept.
21 of 2001. That’s the only way you can turn the ugliness that is going
on. No matter what, this is no hill for a
climber and no time to be a hero for
the intermediate-term crowd. You simply wait it out. Ye who loses the
least right now…wins.