It’s A Start
When is this all
going to end? The market does
not seem to be giving any indication of a blow-off bottom. Yesterday was a good
start when we started free falling. Unfortunately, a little news came across the
wire and buyers decided they wanted to own stocks for a few hours. Nonetheless,
bounces are short-lived and declines keep increasing.
On the positive side, we are seeing
some stocks rallying in the wake of destruction. Engineered Support
(
EASI |
Quote |
Chart |
News |
PowerRating)
stands out in today’s action as it comes closer to breaking out of a very
choppy cup-and-handle base, six weeks in duration.
CACI International
(
CACI |
Quote |
Chart |
News |
PowerRating) has
been creeping higher on lighter and lighter volume. New highs are good, but new
highs on lower volume are bad. Eventually sellers are going to decide that
profit-taking is in order and the stock will probably get hit rather quickly.
Defense stocks continue their rally as
the U.S. moves closer to war. Aerospace giant, Northrop Grumman
(
NOC |
Quote |
Chart |
News |
PowerRating) posts
another new high as it rallies almost five dollars.
When we start to see stocks rallying
in a poor market, i.e., Dow Jones Industrials down 382 points, it is an
indication of future leadership. I will be looking for security and defense
groups at the top of the leader boards as I watch these stocks rally to new
highs. When the market eventually stabilizes, it will require a leading group
with leading stocks to take it higher. It’s no guarantee that these groups
have what it takes, but they are a start.Â
Until Tuesday,
P.S. In two weeks, we
will all convene for TradingMarkets2001.
I intend to share with investors what I have been doing in the recent
environment. I will literally be explaining my daily and weekly routines and how
they put into practice the intermediate-term approach we all know and love.
Additionally, I will be providing an open forum for questions and allow the
audience the opportunity to direct the discussion. Meanwhile, I encourage you to
send me your comments, questions and suggestions in terms of what you would like
to hear about at the conference.