Just buy the dips
The market character has undergone a change in last few days. It is a slow process and many new themes are emerging. Some old themes have for the time being run their course. In a rally of long duration, such correction zones are a bit tricky because if you remain on sideline the new emerging sector rallies you will miss out. If you short at this stage you will need good heart to hold through some nice volatility.
Some things are clearly visible. The large caps are no more the favorite. Some sectors like financials, brokers, airlines, etc. have entered correction zones after strong rallies. The small caps are back in action. More than that several new sectors are emerging as likely to take on leadership. The health care/biotech sector continues to find buy interest. But again the kind of companies leading in the sector are not the ones people are most familiar with. The Internet related sector is also attracting buying. Similarly some software companies are also in recent up trends. The commodity sector and alternative energy sector has seen the largest number of breakouts in recent 20 days. The most attractive sector currently is funeral services!!!!
While the sector action is interesting, it is individual stocks where most of the action is for individual traders. Upside breakouts continue to exceed downside breakouts and for almost 10-15 days the breakouts above 4% have been 100 plus. So this still looks like sector rotation and churning.
In few weeks the markets attention will shift to next earnings and some stocks will start breaking out in anticipation. One thing to watch closely is analysts future earnings estimates revisions. The ratio is moving up currently for 2007.
Some things are clearly visible. The large caps are no more the favorite. Some sectors like financials, brokers, airlines, etc. have entered correction zones after strong rallies. The small caps are back in action. More than that several new sectors are emerging as likely to take on leadership. The health care/biotech sector continues to find buy interest. But again the kind of companies leading in the sector are not the ones people are most familiar with. The Internet related sector is also attracting buying. Similarly some software companies are also in recent up trends. The commodity sector and alternative energy sector has seen the largest number of breakouts in recent 20 days. The most attractive sector currently is funeral services!!!!
CSV a funeral services company with episodic pivots
While the sector action is interesting, it is individual stocks where most of the action is for individual traders. Upside breakouts continue to exceed downside breakouts and for almost 10-15 days the breakouts above 4% have been 100 plus. So this still looks like sector rotation and churning.
In few weeks the markets attention will shift to next earnings and some stocks will start breaking out in anticipation. One thing to watch closely is analysts future earnings estimates revisions. The ratio is moving up currently for 2007.
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2 comments:
Hi Pradeep
I looked at CSV and my telechart in which I have the formula you posted doesn't show the spikes that yours does. This is the formula that I copied from your post. (100 * ((C + .01) - ( MINC260 + .01)) / (MINC260 + .01))>=100 and c>=.75*maxc130 and ( 100 * (C - C1) / C1) >= 5 AND V >= 1000 AND V > V1) is that correct?
Thanks again for all your posts. I am finding them very interesting. I am reading back posts so that I can undertsand the thinking behind your system.
Thanks Again
Bullish
1 ( 100 * (C - C1) / C1) >= 20 AND V > 10000 AND C >= 5
2 ( 100 * (C - C1) / C1) >= 30 AND V > 3000 AND C >= 5
3 (C - C1) >= 5 AND V > 10000 AND C >= 5
4 ( 100 * (C - C1) / C1) >= 10 AND V > 1000 AND C >= 5
5 C > C1 AND V > 5 * AVGV50.1 AND V > 3000 AND C > 5
These five seperate scans give the bulish pivot list
Bearish
1 ( 100 * (C - C1) / C1) <= ( - 20) AND V > 10000 AND C >= 5
2 ( 100 * (C - C1) / C1) <= ( - 30) AND V > 3000 AND C >= 5
3 (C - C1) <= ( - 5) AND V > 10000 AND C >= 5
4 ( 100 * (C - C1) / C1) <= ( - 10) AND V > 1000 AND C >= 5
These give bearish pivot candidates.
you have to use these to get those spikes.
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