Sunday, November 11, 2007
Worst Week for Nasdaq Since April 2002
I have been very concerned for a number of days now about the recent action in the market especially when it came to how well BIDU, GOOG, RIMM, MSFT and AAPL have been supporting this market meantime the number of stocks hitting new 52 week lows has been steadily increasing. I knew, that once they started to crack, that the market would come crashing down. This mrkt has been struggling for a while now, but the hot momo stocks have been doing a very good paint job of making the mrkt look better than it really is. This type of poor breadth and poor leadership is very typical in the ending phases of a bull mrkt. Where fewer and fewer stocks carry the indexes, while under the surface tons of other sectors are literally breaking down hard. Look at the banking, Semiconductor and transportation sectors as examples. These are the three most important sectors. I expect a period of serious weakness in the indexes. I suspect we could easily see the indexes drop 20% from the highs. Now, there will be lots of rallies along the way where the bulls might think that they are out of the woods, but this will only be nothing more than wishful thinking. Markets go up and markets go down, we as traders don't care which way they go, we just need to exploit the opportunities and there will be TONS, both Long and Short. Good Trading.
Posted by Stewie at 6:39 PM
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