[CANSLIM] Today's big picture/m

From: Eric Jaenike <ericjaenike@yahoo.com>
Subject: [CANSLIM] Today's big picture/m
Date: Wed, 31 Jul 2002 08:33:22 -0700 (PDT)

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A quick note on today's Big Picture. Referring to action on the S&P, the author states that price/volume action implies "mild accumulation". I strongly disagree with that. I consider the action on that index to be a sign of distribution as well, as it is indicative of stalling action. From HTMMIS, 2nd edition, pg. 50: "On one of the days in the uptrend, the total volume for the market will increase over the preceding day's high volume, but the Dow's (or any index) closing average will show stalling action, or substantially less upward movement, than on the prior few days".

One other note: the Nasdaq is the only primary index to have flashed a follow through (not including the S&P 600). It also was the index that experienced the nasty give back last Thursday. That giveback was not a good sign. Also, the news that drove the giveback was ominous: Taiwan Semiconductor, the largest chip fab in the industry, announced a nasty revenue miss, revenue guidedown, capex reduction, and capacity utilization reduction to 70%. That is a terrible sign for the chip industry going forward. Also of interest is the NVDA miss last night, as they sell into the PC industry (as well as to Xbox, but I consider that to be an unimportant segment).

So far, I consider the action in this latest rally to be very poor. For those interested in another item to watch, I think the action in MSFT, C, and JPM are of some importance (as well as the XLF in general). Their breaks and subsequent (poor) rebounds are, in my opinion, an important tell on where the market is.

Eric



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<P>A quick note on today's Big Picture. Referring to action on the S&amp;P, the author states that price/volume action implies "mild accumulation". I strongly disagree with that. I consider the action on that index to be a sign of distribution as well, as it is indicative of stalling action.&nbsp;From HTMMIS, 2nd edition, pg. 50: "On one of the days in the uptrend, the total volume for the market will increase over the preceding day's high volume, but the Dow's (or any index) closing average will show stalling action, or substantially less upward movement, than on the prior few days".</P>
<P>One other note: the Nasdaq is the only primary index to have flashed a follow through (not including the S&amp;P 600). It also was the index that experienced the nasty give back last Thursday. That giveback was not a good sign. Also, the news that drove the giveback was ominous: Taiwan Semiconductor, the largest chip fab in the industry, announced a nasty revenue miss, revenue guidedown, capex reduction, and capacity utilization reduction to 70%. That is a terrible sign for the chip industry going forward. Also of interest is the NVDA miss last night, as they sell into the PC industry (as well as to Xbox, but I consider that to be an unimportant segment).</P>
<P>So far, I consider the action in this latest rally to be very poor. For those interested in another item to watch, I think the action in MSFT, C, and JPM are of some importance (as well as the XLF in general). Their breaks and subsequent (poor) rebounds are, in my opinion, an important tell on where the market is.</P>
<P>Eric</P><p><br><hr size=1><b>Do You Yahoo!?</b><br>
<a href="http://health.yahoo.com/">Yahoo! Health</a> - Feel better, live better
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