Posted by 2 June 2003

Tons of Shooting Stars

As I suspected, the market gapped open this morning, launching the S&P 500 over that 965 level. It was off to the races for the market until the Dow touched the 9,000 level. Sellers then stepped in and smacked the market back down. Though the Dow and S&P managed to close on the upside, I’d have to say that the sellers won today’s battle because they were able to push the indices back down towards the lows of the day. A full 25% of my universe of ‘tradable stocks’ made shooting stars today. Here are some charts…

SanDisk (SNDK) jumped out to me as I went through my scans tonight. This stock is up 121% since April 10. I think it’s stretched about as far as it can go, and will probably be at $30 in a couple of weeks. Note today’s shooting star (and the 2 preceding doji) at the upper Bollinger Band, and the overbought stochastic. Yeah, I know, it’s been overbought for 6 weeks now…

Here’s the NASDAQ, which was repelled by that (orange) trendline again today. I think it’s headed back to the middle Bollinger Band, or to that black trendline.

And finally, the Dow. Here’s another shooting star at the top of the channel it’s been in for months. Looks like it’s headed back to the bottom of that channel, which isn’t very far… around 8650.

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Comments

  1. Posted by Duru on June 3, 2003 at 1:11 am

    The shooting stars I am seeing are certainly awesome to behold, with tech being the ugliest. People scrambled like mad to sell today. Remains to be seen whether the bulls will treat this has another instant-buying opp. I am also seeing some amazing range of movement today…

  2. Posted by Michael on June 3, 2003 at 1:20 am

    Yes, the Shooting Stars are shoing some serious selling pressure. How about the NASDAQ’s extreme volume today? Yet nobody seems to be concerned. Complacency is running so high these days.

  3. Posted by Duru on June 3, 2003 at 2:12 am

    Oh yeah – the volume! Just saw it. VERY scary. Here is one with crazy motion and extreme volume: GNSS.
    I am still on the fence about complacency. I see and read enough from the skeptics to believe that underlying sentiment has been pretty bearish all the way up (I know – Sentiment Surveys and what-not say exactly the opposite). I tell ya what – if we finally get a REAL correction, we will know the level of complacency by how viciously we break the underlying support levels that late-comers are waiting to buy upon retest!