Six Things I Am Focused On

  • September 3, 2003
  • Derrick Hobbs


I will not pound the table, I will not scream
and shout. I will however be cautious about the long side at this point in the
broad indices.  At the sake of repeating myself here we go:

  1. The Dow Jones has completed a
    Daily Bearish Butterfly


image src=”https://tradingmarkets.com/media/2003/Derrik/dh090303-01.gif” width=”486″ height=”619″ />

2.
The semis have completed a Daily Bearish Butterfly.


image src=”https://tradingmarkets.com/media/2003/Derrik/dh090303-03.gif” width=”486″ height=”619″ />

3. The Nasdaq 100 Weekly chart has completed a
Bearish Gartley pattern


image src=”https://tradingmarkets.com/media/2003/Derrik/dh090303-02.gif” width=”483″ height=”613″ />

Stocks, like
(
HDI |
Quote |
Chart |
News |
PowerRating),
(
QCOM |
Quote |
Chart |
News |
PowerRating),
(
IBM |
Quote |
Chart |
News |
PowerRating),
(
APOL |
Quote |
Chart |
News |
PowerRating),
(
BRCM |
Quote |
Chart |
News |
PowerRating), (almost any Semi),
(
SOHU |
Quote |
Chart |
News |
PowerRating),
(
OMC |
Quote |
Chart |
News |
PowerRating)
are all completing bearish patterns and hitting Fibonacci resistance zones.  I
would keep tight stops if trading long these names and/or these sectors and
consider taking profits.

 

Now, quickly let me provide a
quick summary of the things I am focusing on:

  1. Bearish Patterns on the
    indices

  2. Bullish Sentiment high and
    climbing (Per Ned Davis Research)

  3. High Short Interest Ratio in
    Nasdaq and Nasdaq 100

  4. Biggest stock fund inflows
    since March 2000 (per NDR)

  5. Mutual Funds are fully
    invested with very low cash to asset ratio

  6. Still a ton of money on the
    sidelines


Translation: I have 4 bearish readings (1, 2, 4 and 6)
and two bullish readings (3 and 5).

My Conclusion:
A correction of 10%-20% at the least is imminent. 

 


Derrik Hobbs