IBD noted that the uptrend is under pressure this weekend, based on the number of distribution days in recent weeks. Friday's action saw distribution all round with the $SOX pacing the way lower on inventory fears as Samsung warned of a supply glut in the DRAM chip market.The $SOX bottomed in Nov. 2009. April marks the 17th month of the current uptrend. Following the last two bear markets the chip sector rose for 18 and 16 months respectively before turning down.
Last August 9th, we noted that the inverse H&S bottom should reach full extension in April-May 2010. The time period for full extension should be equal to the length of time for the chart pattern to develop. So we're in the 9th inning and last week's S&P highs were just 30 pts. shy of the target as depicted on the chart below.
GOOG gapped lower on earnings with a spike in volume. Now it's testing support - this 3rd test could be the BO point.
2 comments:
Jamie,
Seems to me one doesn't need the gap list in this market. Look to the nasdaq leaders: veco sndk cree ffiv brcm nflx gmcr rimm. They provide much volitility to trade with. Fri 7may at the open: SNDK down 1, up 2, down 5 in 1 hour Thoughts?
BL,
Agree, a gapper list would be a waste of time following Thursday's action. SNDK tested recovery highs in early trade and failed. That resulted in a sharp retracement...a common theme in many leading stocks.
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