Be Nimble
More constructive action in the
Nasdaq
and a rounding bottom in the Semis. (Please no jokes.) After the past eleven
months, it is deserved. Just keep in mind, the repairing is going to take time.
Lots of people I have been talking to continue to believe this is it. This is
the bottom. The Nasdaq will now shoot straight up. Targets of 4000 at the end of the year abound. Don’t jump
the gun. Too many people are getting too excited, too quickly. Short memories indeed. It was only a couple of weeks ago we were sitting at 2300
before the Fed showed up.
At the risk of sounding repetitive, this whole move  was made up of stocks
coming off their lows. A stock that goes from 100 to 30, and then rallies 40% to 42 is still down 58%. This will be a process, not an event.
On the breakout front, I wish there were better news. Only a few have showed up
and most continue to fail. The New High List is now contracting because last
year’s favorites continue to break down. The best sector off the lows are the
Semi. Many have broken above their first lines of resistance. They are still
way below their highs. You had to be a bottom fisher to make money in the past
two weeks. The problem with that is you never know if your stock was down
because of the market or because something was wrong with the company itself.
A couple of decent-looking ones as sloppy as they may be are
(
PLT |
Quote |
Chart |
News |
PowerRating) and
(
TYC |
Quote |
Chart |
News |
PowerRating). Â Â
Do not forget that most breakouts
continue to stall or fail. One other note is that a couple of stocks that gapped
up on earnings followed through nicely.
I would be very picky when choosing the
gaps though because market conditions, while better, are still not even close to
what we are looking for.,
On the ugly side, Biotechs still look suspect. I also went through every chart
in the Daily Graphs this weekend. I am finding more and more sectors starting to
top out. This tape continues to be very tricky. It is not an investor’s market.
It is more of a trading market. Be nimble.