I hate to add to the bearish consensus but I have to call ‘em like I see ‘em. Right now I’m seeing a lot of charts which look ready to roll over. A good number of them look a lot like the QQQQ chart — a weak bounce back to the 50-day moving average which reminds me of many of the patterns in William O’Neil’s ‘How to Make Money Selling Stocks Short’. For now the opportunities look better to me on the short side.
Below are charts of the indices as well as some of the better (worse?) looking stocks I found in my scans, including LRCX, BRCM, AAPL, MVL, RIMM, CIEN, RACK and GOOG:
The Nasdaq bounced back to resistance last week and appears to be headed for a retest of the 2400 area. The 50-day moving average and the lower Bollinger Band are in that vicinity so how it acts there will be important technically.
The NASDAQ 100 Trust Shares (NASDAQ:QQQQ) continues to be just a bit weaker than the Nasdaq Composite. It looks like it’s headed for a slide down its lower Bollinger Band.
Will the S&P finally break that 6 month old trendline?
I mentioned the weakness in the Dow Jones Transportation Index a couple weeks ago & nothing’s changed there…
I’ve also mentioned how bad the semiconductors look. Here’s Lam Research (NASDAQ:LRCX) as an example….
Broadcom (BRCM) is another sickly looking semi stock…
Tons of drama for Apple Computer Inc. (AAPL) last week & somehow I don’t think the volatility in that stock is over:
Can all the bloggers posting which superhero they are boost shares of Marvel Entertainment, Inc. (MVL)?
I’ll be watching Research in Motion (RIMM) closely. A break of the December low will confirm a double top…
Ciena Corp (CIEN) (they still exist?!?!?) could give some good action once it breaks that triangle…
Rackable Systems (NASDAQ:RACK) was one of my favorite stocks in early 2006 but that nasty break in July 2006 seems to have taken the wind out of its sails. It rallied back to fill in that July gap but is now languishing.
And last but not least, here’s Google (GOOG) which always seems to be threatening to fill an earnings related gap.
No changes
| Trend | Nasdaq | S&P 500 | Russell 2000 |
| Primary | Up | Up | Up |
| Intermediate | Up | Up | Up |
| Short-term | Down | Up | Down |
(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
Lat Indicates a Lateral trend
Just as long as there is alot of intraday volatility, I am happy.
But good chart analysis – I will keep my eye on those.
>-
re: the intraday volatility — I second that!
qqqq is going down. I’m calling it right here at 43.16
Enjoy your insight of the Markets and commentary of individual stocks. . I was taking a look at MOVI. . Looks like it is consolidating nicely to around its 200 MA of $3.3. . was curious on your thoughts if you have a second. I have learned a lot from you in terms of technicals. . Could you recommend a good trendline book on Technicals?
Thanks, Kevin
Peter, I have to agree with you, at least in the short to intermediate term. BTW, I just realized that the QQQQ chart wasn’t showing up. That’s fixed now.
Kevin, I’d draw a trendline that goes through the December 8th and 18th highs and only go long if it can break above that line.
As for books on trendlines, my favorite read on trendlines guy is the trendline section of Trader Vic: Methods of a Wall Street Master. But you can’t go wring have a technical analysis “bible” around like Murphy’s Technical Analysis of the Financial Markets.
The first week of January 2006 saw the Nasdaq gaining over 100 points. That was after a month of drift, and a last week of negativity in 2005.
With fund money entering the market, don’t count out the same scenario happening.
Bring on the volatility.
Thanks Mike. I guess that is one of my flaws in trading. .I anticipate bounces of the MA’s, but should probably be focusing on the trendlines for the breakouts. . Thus, the reason I was asking for some good Trend Line Analysis Books.
Thanks again,
Kevin
I don’t think anticipation is necessarily bad. It may help you to get in early. I think the keys are to have a good reason for anticipating and to use stops so that you don’t get crushed when you’re wrong.
On the overall averages I’m bullish at the moment. On RIMM and RACK, bearish, but RACK had dropped off my radar. GOOG – I’m tired of waiting.
While I don’t usually trade antici
pation! (shoutout to the RHPS fans!), ditto what Mike said about stops, and overall portfolio “heat” to your stop.
Well it looks like all the indicators are giving hints of a pullback, especially for the QQQQ, but don’t forget that the asian and european markets were open today and they were up very strongly which may push the US markets higher at least for this week.
ALL the indicators? That would be interesting.
Was there ANY open stock bourse showing a loss today?
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Playing extra-long this week and will peel of some margin in a day or two.
Yeah, the NAZ looks weak. The divergences are there (not that price has to follow). My play is in the QID rather than shorting the Q’s. SPY looks tired.
I’m in the Qid now and may add to my position. Great charts. Thanks Mike:)
Yikes!
Pardon me!
Looks I walked into a room of Q bears! You all do look a bit more furry… LOL!
hmmm….
So, you all jumped ship on the Q’s, eh? Left me going long and all alone to fend for myself?
tsk! tsk!
Can I recommend a good razor?
“Bearish consensus,” anyone?
The Markets work in mysterious ways…you’re going to be fooled as usual!