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April 11, 2005
A Raging Bull
Dan Luskin on the MSN Strategy Lab (click here) sees a major bottom ahead for stocks. Luskin suggests that valuations are good, sentiment is overtly bearish and all the technicals are falling into place. While I am not so sure about the first two, I can say that the technicals are indeed falling into place. However, the overall trend for NDX remains down and we have yet to see a catalyst to signal a trend reversal. The current setup in NDX is a classic and has been detailed in the weekly report for subscribers. In addition, I have outlined the changes needed that would turn an oversold bounce into a sustainable advance.
It should also be noted that Luskin’s Strategy Lab counterpart, stock picker extraordinaire Jon Markman, also sees a rally on the horizon. Markman notes relative strength in the internet stocks and the oversold nature of the market. Well, oversold is not a reason to be bullish and the other Nasdaq groups failed to bounce with the internet stocks. This is still a bottom picking exercise fraught with risk. As ma always said, “bottom picking is a nasty habit”. I am waiting for some proof before sticking my neck out.
Posted by Arthur B. Hill at April 11, 2005 10:14 AM