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Thanks. Yes, all my indices remained negative all week. The Nasdaq
fell out of the channel just today (Friday).
Taking my own advice, I sold several stocks earlier this week,
including GDT, RSYS, MRVC, ASND, CUBE and PAIR. I should have sold
BEAV, MRK and GE, but didn't. I held onto QNTM, APM, IOM, and COO,
and have not regreted it (yet).
I did not short MU. BIG MISTAKE! Buying puts on MU when I posted
that message would have paid off 10:1.
When this is over (maybe next week, maybe next month), I am looking to
buy AGPH and CSCO, and maybe some others. CIEN has fallen off my
trendline.
I don't use the NH-NL, or the DOW, S&P, and Nasdaq composites for
buy/sell signals exactly. So I don't get whipsawed by them. I use
them as reinforcers. If a stock I want to buy is near the bottom of
its channel, but the broad indicators are bearish, I will hold off
buying, because the stock may break through the bottom instead of
starting back up. Similarly, if I have missed the bottom, and the
stock is already climbing, I might buy anyway if the broader market is
bullish.
On Fri, 15 Aug 1997 23:06:32 EDT, you wrote:
>Congratulations. Your last Monday's post seems to be quite prophetic in
>hindsight. Did your indicators and channels continue on a sell all
>during this week as well? Did you dump your stocks? When did the Nasdaq
>break through the bottom of the channel? Don't you get a lot of false
>and/or late signals and whipsaws with the NH-NL indicator?
>
>Dick
>
> Mon, 11 Aug 1997 09:12:30 GMT gordon@xxxxxxxxxxx (Guy Gordon) writes:
>>Both the DOW and the S&P 500 indexes broke through the bottom of my
>>channels Friday. I had the DOW in a Raff channel from 5/1/97 thru
>>8/7/97, and the S&P in a Raff channel of the same dates. Both closed
>>below those channels Friday.
>>
>>I also chart the number of new highs minus new lows (NH-NL), and that
>>graph look bad too. Usually the number is in the +100's. Last week
>>it dropped from the +200's to 40. When it goes negative we are in a
>>downtrend.
>>
>>The NASDAQ is still inside its uptrend channel, which I draw as a Raff
>>channel with the same dates as above. But the Nasdaq NH-NL looks as
>>bad as the NYSE.
>>
>>Stochastics and RSI on all three indexes are saying "sell".
>>
>>The problem is, WHY? I see no bad news on the horizon. Interest
>>rates are not going to go up much if any.
>>
>>The only thing I can see "wrong" is that the market is so high already
>>that people have trouble believing it can go higher. So they are
>>looking for any excuse to take profits.
>>
>>If this is so, then the correction will be short and not too deep.
>>Hope I'm right. There is so much money flowing into this bull market
>>that it could spring back up at any time. In fact, if the market is
>>up tomorrow, just forget I made this post.
>>
>>Anyway, don't fight the trend!
>>
>>I sold some stocks Friday, and will sell more Monday. Mostly high PE
>>stocks that have room to correct. I want to have some money
>>available to buy on the dip. Also, I wanted to get off margin.
>>
>>The large-cap stocks seem to have been hit hardest Friday (KO, MRK,
>>GE, etc.). But it will move into the growth tech stocks.
>>
>>I sold my GDT, RSYS, and MRVC, and will sell my ASND, CUBE, and PAIR.
>>I am closely watching my QNTM and INVX.
>>
>>I am holding on to my AGPH, APM, BEAV, COO, and IOM. (As well as INTC
>>and MSFT which I never sell.)
>>
>>On the dip I am looking to buy more AGPH, CIEN, CSCO, and maybe KO,
>>HD, MTZ, and MTC.
>>
>>I am also thinking about shorting MU. Others to look at are ACTM,
>>AMD, AMES, BOOL, EGRP, HD, MRVC, OAKT, TXN, and WWW.
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