Semi’s Tow Market Higher
But I have to add, as I replied to an e-mail
this morning, the point of my analysis is not to predict, but rather to
highlight opportunities that you should be on the lookout for. I don’t know of
any real trader who uses support and resistance in any of its many forms (trendlines,
Fibonacci, bases, channels, etc.) as a prediction tool. The lines get broken.
You look for the next level. Watch for the key patterns there. Take the
opportunity if it comes.
Today’s market is a good demonstration of what I said on March 9:
The disadvantage of long-term trendlines is that they are imprecise for
short-term timing. A monthly bar has plenty of wiggle room for temporary dips
below it.
So while some people jumped the gun and assumed that Intel
(
INTC |
Quote |
Chart |
News |
PowerRating) was
digging a hole to China after penetrating its five-year trendline, it still had
every opportunity to come back — which appears to have happened today.
It seemed to come together nicely as the SOX
(
BTK |
Quote |
Chart |
News |
PowerRating) pattern I showed you
yesterday continued its clone-like ways. Too good to be true. So don’t be get
too overconfident.
Finally, even the much-bashed biotechs
(
BTK |
Quote |
Chart |
News |
PowerRating) did a base hit
by reversing from its lows off the range lows, long-term trendline, and its
61.8% retracement (1998 lows – Sept. 2000 highs).
Now — we look for follow-through.
See you Friday,