Friday, January 13, 2006
Marketz & Strategies : Rolling pullback in store ?
When the markets were rallying the last seven consecutive days before Thursday and looked unstoppable, Dave Landry at Trading Markets pointed out that markets will sometimes stage a rolling pullback. This is one where the market doesnt drop all at once, but specific leading stocks and strong sectors will pull back one at a time. Sometimes even one day at a time.
I was intrigued by the idea. Its still too early to say (because the broader market has been rallying till Thursday)-but still, lets examine the possibility.
Firstly, what are the sectors/stocks/ETFs with the most "mo" recently ? And I mean real mo. That should be easy.
1) Oil services : OIH (started decline Thu, Jan 12)
2) Precious metals : XAU & HUI (still rising)
3) Semiconductors : SMH (Doji on Jan 12, significant decline Fri, Jan 13)
4) Biotechs : IBB (Doji on Jan 10, decline on Jan 11)
5) Airlines : XAL (Doji on Jan 9, decline began in earnest Jan 10, now looks very bearish)
7) Internet : HHH (decline began Jan 9)
8) Japan small cap : JOF (consolidating)
9) Networkers : NWX (decline on Jan 12)
Hot Stockz - ~10-20% YTD return (golly !)
1. AAPL : consolidating
2. SNDK : they took it down Jan 13
3. GOOG : took it down Jan 12
4. NEM : continues to rise
5. TIE : decline began Jan 9
6. ELN : doji on Jan 13
7. BRCM & MRVL : took it on the chin Jan 12
I'm sure I've left out a couple of names, but you get my drift. If there is anything at all to this rolling pullback idea, may we look forward to a decline in gold related names next ? After all, only gold remains untouched among the momo sectorsand it is rather stretched. Thats why Newmont's standing tall too. Now, I know there's all that geopolitical stuff with Iran supporting gold. I dont care. Russia's pipeline scare last week neither hurt stocks nor helped natural gas. Listen only to prices. I'll be waiting and watching.
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