Be Real Picky (Contd.)
Gloria:
“Do you know that 65 percent of people murdered in the last 10 years
were killed by handguns?”
Archie Bunker: “Would it make you feel any better, little girl,
if they were pushed out a window?”
Gloria: “Wow, that’s convoluted logic!”
Archie: “Yes, and that’s the kind of straight thinking I am
trying to put across to you.”
Archie’s answer on TV editorial: “If
it was up to me, I could end all the skyjacking tomorrow. You’s arm all your
passengers. Then there ain’t goin’ to be no more superiority there, so no one
will pull out a rod. Airlines would not have to search passengers on the ground
no more. They would just hand out pistols at the beginning of the trip and pick
them up again on the way off. Case closed!”
–Excerpt from “All In The Family”
Logic. That was logic to Archie Bunker.
Frankly, it seems the market’s logic is
almost as bad. After all, isn’t logic supposed to work in the markets. I
don’t think so.
Let’s make a little list:
Juniper announces numbers, says they will miss upcoming quarters and has no
visibility…Big Rally.
Lam Research misses estimates, fires a ton of people, has no clue to the
future…Rallies Nicely.
Amazon comes up with better losses than expected but refuses to go in depth as to where the numbers are coming from…analysts are bewildered and
befuddled…Big Rally.
Some guy with the last name Joseph (not Abby Joseph) says that things are terrible in
Semi Land, sees no light at the end of the tunnel but because things supposedly can’t get any worse…upgrades
them…Monster Rally.
I could go on and on about the bad news but I think I made my point. Do you know what my point
is? Very simply: I couldn’t care less about the news!
Why not? Because for right this second…the market doesn’t care. Now I know that
Dan Niles of Lehman Brothers said that the Nasdaq and Semis will rally for one more week and then sink 33% into the summer. Not 32%, but 33%! I just
don’t care.
I believe in reality, not opinion. The only facts I care about are the movements in the
market and interpreting them as correctly as possible. In my last report, I mentioned that on
Tuesday, April 10, the Dow, Nasdaq and S&P 500 had follow-through days. My best guess was a move of intermediate-term
consequence, led by Technology. So far, so good. But I am not jumping for joy just
yet. It is still a tough call for the intermediate-term trader…
The best moves were reserved for stocks that were down 70% plus. Hmm…that’s just about everything.
The Semis are just getting to the mid-high side of their bases. The same names
I have been harping on continue to be the ones to watch:
(
AMAT |
Quote |
Chart |
News |
PowerRating),
(
KLAC |
Quote |
Chart |
News |
PowerRating),
(
LRCX |
Quote |
Chart |
News |
PowerRating),
(
NVLS |
Quote |
Chart |
News |
PowerRating) and a couple of names that popped above resistance
are
(
BRKS |
Quote |
Chart |
News |
PowerRating) and
(
LTXX |
Quote |
Chart |
News |
PowerRating).
Right now, I will just tell you I expect more upside near-term, especially with
the S&P looking ready to pop above resistance at 1185 and the Nasdaq at
1980. But I would be real, real picky and play things close to the vest. If this
baby wants to get legs, we will all know soon enough. Not
from opinion, but from stock price action.
Now I wouldn’t want to leave you without telling you what you need to be careful
about. Did you see the retailers the last few days? Of course, it was all blamed on the
weather. You may just want to see a few charts.
These retailers and others may hold up during a rally…but when the rally stops…I would be reevaluating very quickly.
Case closed!
Update:
Monday, April 16, 2001
I really hated to take down my Archie
Bunker comments, so I will post an addendum.
Not much to talk about with Monday’s
action. A pullback is welcome after the last few days…but watch the pullbacks
closely. As I went through a ton of charts over the weekend, there is still a
void of leadership. All of the move was stocks that were down by the biggest
margins. It may be time for the chop. Lots of backing and filling for me. I am
still mostly on vacation.
If you want to see what does have some
good relative strength, here you go…
The best
of the biotechs is:
but I never trust fad businesses…
Looks to be setting up nicely…
Broken record time: Most breakouts have failed over the past few months. Close
stops on all.
Gary
Kaltbaum on TradingMarketsWorld! Gary Kaltbaum will be appearing on the
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