Nasdaq: Familiar sell-off? (artigo)
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Be prepared.
And be afraid... be very afraid.
TRIN @ 4.44
Ou isto é o início de um Crash ou é um sinal de capitulação prolongado... ou então é um sinal bull para o longo prazo. Das duas, três!
Aconteça o q acontecer, estou preparado. Alias, já estou positivo on balance. Infelizmente...
Get it?
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Nasdaq: Familiar sell-off? (artigo)
Nasdaq: Familiar sell-off?
Tomi Kilgore says this still looks to be a correction, but be prepared.
The sell-off is starting to look familiar
Commentary: Still a correction, but prepare for the worst
By Tomi Kilgore, CBS.MarketWatch.com
Last Update: 12:01 AM ET March 22, 2004
NEW YORK (CBS.MW) -- I've never been in the Boy Scouts, but the financial markets have taught me the same lesson over the years -- always be prepared.
The Nasdaq Composite's ($COMPQ) pullback became a full-blown correction when the decline surpassed the 10-percent threshold last Tuesday. The index had hit an intraday low of 1,928, 10.5 percent below the Jan. 26 high of 2,154.
Since the Nasdaq had nearly doubled from October 2002 to January 2004, the sell-off still didn't seem worthy of any real concern. The economy may not have been as strong as expected, but it was still strong, and was poised to get even stronger as soon as the job market improved like the Federal Reserve kept saying it would.
And yes, the longer-term trend is still up, and still has a lot of cushion before it is really threatened.
But the Nasdaq seems to be getting a bit more comfortable in its new surroundings, which are starting to look a little too familiar. And the more comfortable it becomes, the harder it will be to remind it that it is still only a correction.
So while it is too soon to start positioning for a new trend, it would be prudent not to take the declines too lightly, and to start opening up our minds for a possible protracted pullback.
Nasdaq's comfort zone
Despite all the hectic action in the Nasdaq early week, it stayed well within the lower half of its "comfort zone."
Ever since it reached its high in January, and in hindsight a few weeks before, the index has been hammering out a very nice downward-sloping channel, which basically is an expanded version of a downtrend line.
Draw a line connecting the Jan. 26 high of 2,154 and the March 5 high of 2,069, and extend it through the present. The Feb. 19 high of 2,095 falls just a few points shy of touching the line.
A parallel line starting from the Feb. 4 low of 2,014 will also touch the March 16 low of 1,928.
Extrapolating the data, the channel seems to be declining by about 3 1/2-points per day.
So the 4-percent rallies from early- to mid-February and from late-February to early-March didn't actually make the bears uncomfortable at all, as they only worked to hammer out this new channel.
And last week's two-day, 2.5-percent rally off Tuesday's low did nothing but just brush up against the midway point of the channel.
Based on Friday's close, the Nasdaq would have to rally 1.8 percent Monday to reach the channel's midpoint at about 1,975, and rocket up 4.9 percent to touch the upper boundary of 2,035.
Conversely, the index can tumble 1.3-percent to 1,915 and stay within its comfort zone.
A little too familiar
What made the declines characteristic of a trend consolidation have begun to morph into one of the trend's biggest adversaries.
There was no real reason for the sell-off to start, except perhaps gravity (valuation) and the concern that the economy might be getting too strong.
At the start of the market's weakness, stocks would slide on strong economic data, as investors feared that the Federal Reserve would have to act sooner than they had said they would to slow down the economy by ratcheting up interest rates. Weaker-than-expected data would have the opposite effect.
The counter-intuitive nature of the market's reaction was a sign that bulls were just taking a breather, and would eventually reassert themselves.
Then, investors got exactly what they wanted, but the market still fell. The continued lack of strong job growth -- just plain growth was no longer enough -- should have alleviated fears of a rate hike, but stocks fell anyway as worries of an economic slowdown started to trigger selling.
And now, we're back to where we were before the latest bull market began -- traders are watching their screens for terror-related news flashes, and worrying about the effects on the "fragile" economic recovery.
The problem is, the target keeps moving. And if phrases such as "fears of," or "concerns over" and "worries of" keep governing investor action, it can certainly become self-fulfilling. The market, and future fundamentals, have a way of giving investors what they don't want.
What the Nasdaq needs is for something with a large amount of influence to step up and get investors to face their fears and move on.
But it's just not getting it.
No help from its leaders
"The many leading issues that are pulling back are an indication that the market is still not in a position to stage a more prolonged uptrend yet," said RBC Dain Rauscher technical analyst Bob Dickey.
Microsoft (MSFT), the Nasdaq's most heavily weighted component, has to take responsibility for the index's slide, as the stock has just concluded its eighth-straight week of declines. And what's worse, the stock just confirmed the break of a 20-month uptrend line, erasing any memory of its "longer-term trend."
On March 10, the software behemoth's cut through a line connecting the July 2002 low of $20.71, March 2003 low of $22.55 and the November 2003 low of $24.84.
The line then quickly transformed into resistance, deterring a rally attempt the falling day, when the stock was up as much as 41 cents in intraday trading before closing down 28 cents.
For Intel, the Nasdaq's second most heavily weighted member, the chip sector bellwether completed a "double-top" reversal pattern in late February.
More recently (early March), the stock fell below its 200-day moving average, something many chart watchers see as a bull vs. bear market barometer (Microsoft has been below its 200-day for over a month now).
Microsoft hasn't been in an uptrend since late-November of last year, and Intel is starting to run out of excuses.
So what does that mean for the Nasdaq? Be prepared.
Tomi Kilgore says this still looks to be a correction, but be prepared.
The sell-off is starting to look familiar
Commentary: Still a correction, but prepare for the worst
By Tomi Kilgore, CBS.MarketWatch.com
Last Update: 12:01 AM ET March 22, 2004
NEW YORK (CBS.MW) -- I've never been in the Boy Scouts, but the financial markets have taught me the same lesson over the years -- always be prepared.
The Nasdaq Composite's ($COMPQ) pullback became a full-blown correction when the decline surpassed the 10-percent threshold last Tuesday. The index had hit an intraday low of 1,928, 10.5 percent below the Jan. 26 high of 2,154.
Since the Nasdaq had nearly doubled from October 2002 to January 2004, the sell-off still didn't seem worthy of any real concern. The economy may not have been as strong as expected, but it was still strong, and was poised to get even stronger as soon as the job market improved like the Federal Reserve kept saying it would.
And yes, the longer-term trend is still up, and still has a lot of cushion before it is really threatened.
But the Nasdaq seems to be getting a bit more comfortable in its new surroundings, which are starting to look a little too familiar. And the more comfortable it becomes, the harder it will be to remind it that it is still only a correction.
So while it is too soon to start positioning for a new trend, it would be prudent not to take the declines too lightly, and to start opening up our minds for a possible protracted pullback.
Nasdaq's comfort zone
Despite all the hectic action in the Nasdaq early week, it stayed well within the lower half of its "comfort zone."
Ever since it reached its high in January, and in hindsight a few weeks before, the index has been hammering out a very nice downward-sloping channel, which basically is an expanded version of a downtrend line.
Draw a line connecting the Jan. 26 high of 2,154 and the March 5 high of 2,069, and extend it through the present. The Feb. 19 high of 2,095 falls just a few points shy of touching the line.
A parallel line starting from the Feb. 4 low of 2,014 will also touch the March 16 low of 1,928.
Extrapolating the data, the channel seems to be declining by about 3 1/2-points per day.
So the 4-percent rallies from early- to mid-February and from late-February to early-March didn't actually make the bears uncomfortable at all, as they only worked to hammer out this new channel.
And last week's two-day, 2.5-percent rally off Tuesday's low did nothing but just brush up against the midway point of the channel.
Based on Friday's close, the Nasdaq would have to rally 1.8 percent Monday to reach the channel's midpoint at about 1,975, and rocket up 4.9 percent to touch the upper boundary of 2,035.
Conversely, the index can tumble 1.3-percent to 1,915 and stay within its comfort zone.
A little too familiar
What made the declines characteristic of a trend consolidation have begun to morph into one of the trend's biggest adversaries.
There was no real reason for the sell-off to start, except perhaps gravity (valuation) and the concern that the economy might be getting too strong.
At the start of the market's weakness, stocks would slide on strong economic data, as investors feared that the Federal Reserve would have to act sooner than they had said they would to slow down the economy by ratcheting up interest rates. Weaker-than-expected data would have the opposite effect.
The counter-intuitive nature of the market's reaction was a sign that bulls were just taking a breather, and would eventually reassert themselves.
Then, investors got exactly what they wanted, but the market still fell. The continued lack of strong job growth -- just plain growth was no longer enough -- should have alleviated fears of a rate hike, but stocks fell anyway as worries of an economic slowdown started to trigger selling.
And now, we're back to where we were before the latest bull market began -- traders are watching their screens for terror-related news flashes, and worrying about the effects on the "fragile" economic recovery.
The problem is, the target keeps moving. And if phrases such as "fears of," or "concerns over" and "worries of" keep governing investor action, it can certainly become self-fulfilling. The market, and future fundamentals, have a way of giving investors what they don't want.
What the Nasdaq needs is for something with a large amount of influence to step up and get investors to face their fears and move on.
But it's just not getting it.
No help from its leaders
"The many leading issues that are pulling back are an indication that the market is still not in a position to stage a more prolonged uptrend yet," said RBC Dain Rauscher technical analyst Bob Dickey.
Microsoft (MSFT), the Nasdaq's most heavily weighted component, has to take responsibility for the index's slide, as the stock has just concluded its eighth-straight week of declines. And what's worse, the stock just confirmed the break of a 20-month uptrend line, erasing any memory of its "longer-term trend."
On March 10, the software behemoth's cut through a line connecting the July 2002 low of $20.71, March 2003 low of $22.55 and the November 2003 low of $24.84.
The line then quickly transformed into resistance, deterring a rally attempt the falling day, when the stock was up as much as 41 cents in intraday trading before closing down 28 cents.
For Intel, the Nasdaq's second most heavily weighted member, the chip sector bellwether completed a "double-top" reversal pattern in late February.
More recently (early March), the stock fell below its 200-day moving average, something many chart watchers see as a bull vs. bear market barometer (Microsoft has been below its 200-day for over a month now).
Microsoft hasn't been in an uptrend since late-November of last year, and Intel is starting to run out of excuses.
So what does that mean for the Nasdaq? Be prepared.
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