Re: [CANSLIM] Bear Rally?

From: "Patrick Wahl" <pjwahl@attbi.com>
Subject: Re: [CANSLIM] Bear Rally?
Date: Sat, 13 Apr 2002 12:44:01 -0600

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On 13 Apr 2002 at 12:35, Duke Miller wrote:

> I don't want to start anything, but....since it's the weekend.

oh sure....

> So what kind of market are we in, anyway?
>

I was trying to answer this question the other night, all I could figure out is that the
market is mixed up. Here are some observations, maybe someone can put things
together.

Nasdaq selling off after rally to a lower high than the high set in January. Right now
sitting near support set about 2/22, below 50 day MA, which is sloping down.

S&P a little stronger, recent rally carried it just about back to old highs, it is
somewhat above those Feb. lows, support around 1075, also below 50 day.

Dow quite a bit stronger, the recent high surpassed the Jan. highs, recent selloff not
as severe, it's sitting on 50 day MA.

Russell 2000 at its highest level since July, made new high on Friday relative to last
8 or 9 months.

Vix is up a little bit, off the very low levels it was at, but still towards the low end of
its range (lower means too much optimism, a contrary indicator). I also notice that
the cummulative A/D line for the NYSE has been in a steady uptrend since Sept.
lows, the Nasdaq A/D line has rallied a bit, but for the last 2 months has gone
sideways to lower.

Lets see - large caps doing ok in the form of the Dow, small caps are the strongest
group as represented byt the Russell 2000 (that would be our little universe of
canslim stocks), the S&P and Nasdaq, I think you could say the real guts of the
market in terms of broad representation of industries and a large chunk of the total
market cap, are looking flat to weak.

Maybe someone can say something about which stocks should be leading if we are
at the beginning of an economic recovery, I'm not sure how to interepret this stuff,
like I said. I think valuations may still be weighing on the nasdaq, and what I am
reading says this will be a weak to moderate recovery, so earnings may not be
storng enough to allow the nasdaq to really get rolling this year.

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