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April 28th: The bad news - yesterday's 'strong' finish in the tech markets dissipated in a wave of selling from the starting bell. Bad again was the higher volume. The Russell 2000 was the worst hit, slicing a solid 2% off yesterday's indecision. The semi-conductor index held up better and at least managed to hold last weeks lows along with the NASDAQ 100. Positives? The $NASI finally dropped below -950 - the next cross of the 5-day EMA will be a 'buy' signal here. The $NAA50 is already in the bounce zone but reversed an earlier 'buy'. I am still waiting for the $BPCOMPQ to enter the long term bottom zone (sub 34). On the latter indicator Ted Burge recommends waiting for a move below 30 and then a PnF reversal (a move from 'O's to 'X's) before looking to 'buy'. I would look for a crossover in the 5-day EMA's of the $NASI, $NAA50, and $BPCOMPQ before buying. When we see all three indicators showing green arrows it will be a time to 'buy' tech and cover tech shorts.

Breakout failures: APPB featured for 27th Jan. CGI featured for 31st Jan. DAVE featured for 14th March. HURC finally succumbed after missing its target by a couple of dollars. It featured back on October 1st 2004. PTEC featured for February 8th. SMBI featured for April 7th. WGAT featured for April 11th.

Breakout targets met: none

April 27th: Interesting action in the markets. Yesterday's crack in the various bearish flags on higher volume should have been a portent for worse to follow - but after a sloppy morning markets managed to finish higher on the day and on higher volume, marking a day of accumulation. The NASDAQ and NASDAQ 100 closed higher but ended below a newly developing resistance, resistance which will likely trigger a good buy signal when breached to the upside. Today's action in the tech indices does not rank as a bullish piercing pattern - so bears still edge control, but another day like today for the bulls may be enough to put a bottom in place. The Dow managed a bullish piercing pattern (a close over half of the prior days losses) but volume came in lower. The S&P had a day like the tech indices, no bullish piercing pattern but managed to end the day up on higher volume. The Russell 2000 and semi-conductor index were the weakest indices - today's dojis suggesting indecision. Last weeks lows will be key to hold if this is the bottom - Wednesday was a step in the right direction for the markets

Breakout failures: AYZ featured for April 25th. ASPM featured for April 22nd. DDIC featured for April 7th.

Breakout targets met: none

Model portfolio: LRT stopped out.

April 26th: The various bearish flags and wedges started to break on heavier volume. Another day of distribution to follow a day of lacklustre buying. What will Wednesday bring? Futures were up slightly as of 4:00 am ET but give little inclination as to what may follow. If these early stage breakdowns develop into another leg of the downtrend we will have one of two things happen; [1] A swift crash as last weeks lows are taken out, lasting a few days, or [2] A low volume decline which holds last weeks lows forming a bottom in the market. The reason we cannot exclude [1] is because crashes occur from oversold (not overbought) market conditions. Irrespective of what happens, or how it happens, the point of this is that we will soon have a prime buying opportunity. Crashes are great buying opportunities - they go down fast but come back equally fast - setting the bottom in place. Arguments for a return of the bear market won't be valid until we see how far the next bounce goes - remember markets did put new highs in January 2005 mainting a sequence of higher highs and higher lows, this is not bearish. If the spate of recent subscriber cancellations is a guide it looks like many are throwing in the towel (compared to strong subsciber growth in January - oh how a few months can change things!). On the plus side, there were no new breakout failures to report.

Breakout failures: none

Breakout targets met: none

April 25th: Today added to the tentative bear flags and wedges in each of the markets. I have marked these patterns in on their respective charts. Shorts will be rubbing their hands with glee as prior resistance (the sloppy sideways action which was support in March) had held firm. If these patterns play out to form we should see a retest of last week's lows. Given the oversold nature of the secondary indicators I suspect the test of lows will be a good time to buy (with stops on a loss of these lows). The S&P sits closest to resistance and is the best index to short in the near term. A move over 1,164 should switch to a cover and buy. Prepare to man the pumps.

Breakout failures: none

Breakout targets met: none

April 24th: Friday was like a repeat of Wednesday but the key difference was the lack of volume. The drop in volume, lower than that of prior day's gains, suggests the sellers are running out of steam. Ideally we should see low volume into the decline (and perhaps new lows) which would nicely mark the bottom as secondary indicators tick up. Fresh breakouts will be of greater significance in this environment. New leaders will emerge over this week and next. On the flip side, bears will be waching for failed tests of January-March support, now resistance, in the tech indices [NASDAQ and NASDAQ 100], Dow and S&P. Thursday's gains and Friday's losses qualify as such a test in the NASDAQ, NASDAQ 100 and S&P. The Dow remains some distance to prior support/resistance. Bears will also watch for a bear flag breakdown in the Russell 2000 which could occur as early as tomorrow. A tradable bottom will be soon. The $NASI is only some 40 points away from a major bottom as the $BPCOMPQ dropped into the 30s. The $NAA50 is already at deeply oversold levels.

Breakout failures: CAKE featured for February 10th reversed an early 10% gain. DG featured for February 4th failed to follow through on its breakout, moving sideways until Friday's loss of support.

Breakout targets met: none

April 21st: Huge swathes of green bathed markets but there was little substance behind the gains as volume limped in lower (and in the case of the Dow, significantly lower). Short covering looks to be driving the rally and until we see a solid move through March/April congestion around the 200-day moving averages in the tech indices [NASDAQ and NASDAQ 100] and Dow I would remain cautious. The Russell 2000 surpassed its 200-day moving average but congestion here kicks in the range of 605-620. For the S&P we will likely see the struggle at 1,163 Friday. Secondary indicators had a mixed day. The $BPCOMPQ fell lower while the $NAA50 sharply rallied generating a "buy" signal. The slower moving $NASI ticked upwards but hasn't generated a "buy" signal. Indices sitting at former support are the Russell 2000 and the Semi-conductor index and are perhaps the best value at today's close (for disclosure purposes I hold a couple of Russell 2000 calls). The [NASDAQ and NASDAQ 100] remain in the center of their respective downward channels and could go either way. The Dow has moved off support and looks best placed to challenge 10,375 before encountering supply concerns. The S&P is perhaps the most vulnerable in the short term - but only with respect to its proximity to resistance, it may be the lead index for the next rally. On a side note, there were no breakout failures to report after the recent wipeouts.

Breakout failures: none

Breakout targets met: none

April 20th: So much for 'pink sheet' INTC and YHOO influencing the market. Fear tightened its grip as sellers once again rushed to the exits. The tech indices [NASDAQ and NASDAQ 100] ignored the earnings and instead focused on the core-CPI figure. The semi-conductor index held on to January support but it is running out of options. No index escaped the sellers wrath. The S&P marked new lows as it closed below channel support but on-balance-volume continues to hold on. The Dow touched 10,000 and finished just above this level. The Russell 2000 tested former channel support (now resistance) and failed - reversing back to Friday's lows. Not surprisingly, the secondary indicators [$BPCOMPQ, $NASI, and $NAA50] took another big step down. The $BPCOMPQ remains the indicator furtherest away from a long term bottom (at least at a level to match the deeply oversold levels of the $NASI and $NAA50). Look for 34 or below in the $BPCOMPQ to complete the major bottom.

Breakout failures: ACMR featured for April 8th. BGP featured back for December 10th gapped down after warning for a loss in Q1. FO clipped its second stop. The stock featured for January 24th and April 11th. MNS featured for February 16th.

Breakout targets met: MACR featured on January 21st for a 25% gain.

April 19th: Positive reports from YHOO and INTC are likely to set a positive tone for tomorrow (futures were up as of midnight ET). A gap open would leave a positive island reversal in the tech indices [NASDAQ and NASDAQ 100] - a strong bottom formation. However, the time to buy will be on the retest of Monday's lows. We still need to some decent buying volume and expect supply to re-emerge on the tests of the respective 200-day moving averages in each of the markets. It will be interesting to see what impacts are had on the secondary indicators [$BPCOMPQ, $NASI, and $NAA50].

Breakout failures: CHIR featured for March 3rd. ICCA featured for February 14th.

Breakout targets met: none

April 18th: The markets took a rest after three days of heavy selling. Nothing in today to suggest the bulls have regained any control. Low volume confirmed the lack of buying interest even at the deeply oversold levels we currently sit at. The small doji in the Dow marks it as the most likely index for a small bounce tomorrow. The quiet day didn't stop the rout of breakouts. But we are approaching ever closer to a tradable bottom.

Breakout failures: BAMM featured for November 4th logged early gains of 12% before turning on itself. CNTY featured many times as a breakout. The April 8th feature ended in disappointment. INGP's takeover by NDAQ was not the bargain it appeared to be on Friday. ISLE was another disappointment on the day. The stock featured on Feb 15th. MSS clocked up gains of 24% before it succumbed to last week's selling. The stock featured on August 23rd. OTIV from April 14th also fell out of favor reversing its breakout. UGI suffered a big intraday swing, hitting its stop price but closing strong. The stock featured on April 13th.

Breakout targets met: none

April 17th: A week most people will want to forget but this is how bottoms are made. In terms of structure, what we saw was very similar to last August (which set up a very nice rally). Even if we are looking at the return of the bear market we will still have periods when the market rallies. Just keep an eye on the secondary indicators [$BPCOMPQ, $NASI, and $NAA50]. The time to buy won't be on the first flush of buying, but on the likely insipid retest of whatever lows are put in (be it Friday's lows, or a new low this week). The retest of lows should coincide with a bullish divergence in the secondary indicators - this will be the time to start buying. Breakouts will be of greater interest as this is where the new leaders (and sectors) will emerge. Former leaders (e.g. energy and retailers) will likely not be a component of the new rally. It may be the time for the pharmas and generic drugs to shine but time will tell.

So what of the markets. The NASDAQ reached its measured move target down but still has room to reach its downward channel support. The huge increase in volume was a boom coinciding with a big move in volatility will help ease some of the complacency in the market place. The NASDAQ 100 hasn't reached its measured move target and still sits in a limbo of support. The semi-conductor index had a rotten week. The promise of the reversal head-and-shoulder pattern was shattered as the index finished Friday at support of its January lows (the former head of the reversal pattern). Watch for sideways action as the bulls and bears duke it out at support. The Dow has a logical support of 10,000 to aim for which coincides with a downward support line from November and December. The Russell 2000 sliced through whatever support its downward channel was supposed to give - this could be a bad omen for channel support in the tech indices (just as the 200-day MA failed as support first in the tech indices before the others followed). The Russell 2000 CCI indicator at -300 is heavily oversold so watch for a test of former channel 'support' now resistance as oversold conditions are relieved. The S&P also finished below support of its downward channel although on-balance-volume hangs on to support.

Breakout failures: CMVT featured for March 16th. FUL featured for March 24th failed to break $29.11 resistance and reversed through its base breakout. IMN featured for January 26th and March 2nd traded sideways for 6 weeks before bears took control. ISRG featured for April 7th although technicals remain positive - lower volume suggests a bullish consolidation but for the purposes of my analysis is consider a 'loss'. LRW featured for February 4th but gapped down into its February breakout gap. VCI feautred for February 23rd, reached highs of $38.08 before reversing to close below its February brreakout gap. WIND featured for March 2nd hit its stop after three days of heavy selling.

Breakout targets met: BKST featured for March 29th reached its target following a consortium buyout offer.

Model portfolio: KSWS and URBN stopped out.

April 14th: If the bulls took solace from yesterday's lower volume, today they took it flush in the face. Volume spiked higher to mark a distribution day as all indices took a beating. The Russell 2000 is the only index close to some level of support (namely the downward price channel), but it would have to close higher tomorrow if this channel was to be considered support. Markets look to be in capitulation mode, similar to what we saw last July. Of greater importance will be the shape of the next bounce. Will we see new highs, or will it develop into some form of double top?

Breakout failures: ABP featured for April 4th, finished with a nice (bullish) doji - but not before hitting its stop price. ENER also failed to live up to its billing as it too succumbed to its stop. It also featured on April 4th. UNP took a big hit today ending its breakout intentions. It featured for March 23rd. TMY featured for March 3rd and after logging an impressive 42% gain it eventually reversed to pass through its stop today. LII has started to rollover as part of a rounding top - bigger losses look likely here. It had featured as a breakout for February 11th. MAGS featured for March 16th also took a knocking.

Breakout targets met: none

April 13th: Today was an excellent example as to the importance of the secondary indicators. None of the three tech secondary indicators [$BPCOMPQ, $NASI, and $NAA50] gained yesterday when the market rallied. Unfortunately, one must wait for the market to close to find this out. But it can be useful for deciding how close to place one's stops. In a down trending $NASI it is perhaps prudent to use a 5% stop or less in long positions. When it is in an uptrend, a looser 8-10% stop can be used for such positions. Use the reverse for short positions. There will be alot of naysayers out there and a short sharp shock cannot be ruled out - but we are closer to a tradable bottom than a drop into the bowls of the earth. Today's lighter volume to the selling will give some inkling that the bears are running out of steam. Still to early to be buying big - but I will endeavor to find some value plays for readers and members.

The key negative on the day was the semi-conductor index. It looks like the reversal head-and-shoulder pattern it was hanging onto failed today.

Breakout failures: MOS featured way back for September 1st succumbed to its stop price after mastering a miserly 16% gain. PCLN only managed to hang on a couple of weeks having featured for March 28th. SCHL suffered the same fate, it featured for March 21st. Pushed my USG stop a little tight based on yesterday's close. Still looks good as of today although I would not rule out a move to low $38s.

Breakout targets met: none

April 12th: Quite an exciting day. First the selling triggered by a record trade deficit, followed by a sharp reversal once the Fed's March minutes (madness) were released. Volume surged during the late day rally giving the nod to the bulls. Does this class as a "follow through" day to last Thursday's buying? Until we see a breach of congestion as marked by 2,018 in the NASDAQ, 1,500 in the NASDAQ 100, 10,545 in the Dow, 620 in the Russell 2000, 420 in the semi-conductor inde, and 1,190 in the S&P the answer would be "No" - but Tuesday was a step in the right direction. The market started like it was going to be an ugly, but the late day surge would have forced many shorts to cover - the bulls will need to assert themselves and push the market higher, not sideways as has been recent form. Further skepticism comes in the form of the secondary indicators [$BPCOMPQ, $NASI, and $NAA50], all of which weakened today. The worst may yet be to come...

Breakout failures: BPTR featured for December 29th hit its stop after chalking up an early 21% gain. WBSN hit its stop but ended the day up on a bullish hammer. The stock featured for January 28th.

Breakout targets met: none

April 11th: Not much to say about Monday. Ford set a bad tone, but neither buyer nor seller was willing to enter the fray. Volume turned a lighter note to Friday which may put the bulls at greater ease than the bears given the day was a down day - but such a judgement would be marginal. Minimal breakout action - none of the scans I use turned up anything of note. Higher energy prices may drag the market but if the economy continues to limp along then demand for commodities should drop (along with price). Conflicting negatives won't help (i.e. strong earnings = greater demand for commodities = selling pressure, lower earnings = falling demand for commodities = selling pressure). Cash is king in this environment. As for the secondary indicators [$BPCOMPQ, $NASI, and $NAA50] - downside has resumed, but these indicators are likely to give the cleanest evidence of a bottom when it occurs.

Breakout failures: SYNC featured for March 22nd hit its stop after some continued selling from a $3.75 high.

Breakout targets met: none

April 9th: The only saving grace from Friday's selling in all markets was the lighter volume. Unfortunately, whatever bullish foundations put in place on Thursday were quickly torn down. Were there any positives? In the NASDAQ the MACD trigger line was able to break above bearish divergence resistance while it retained its shorter bullish divergence. On-balance-volume sits against its 20-day moving average trigger line as slow stochastics continues its upwards trend. The NASDAQ 100 reversed off its channel resistance on considerably lighter volume having managed to break the bearish divergence in the MACD trigger line on Thursday. Will the NASDAQ 100 end its downward channel next week? The semi-conductor index marked a MACD trigger line crossover as it bounced off prior bearish divergence resistance (now support) of this indicator. However, the index remains inside a 410-420 trading range (which lurks inside the 38-62% retracement of the Jan-Mar move).

The Dow managed a much welcome drop in volume after a string of distribution days in March. Like the semi-conductor index we did see a MACD trigger line crossover here, but this occurred well below the bullish zero line. An earlier crossover in the on-balance-volume 20-day MA held Friday. Watch for a potential head-and-shoulder reversal pattern on a move to 10,396. This would coincide nicely with the test of the 200-day MA. Losses in the Russell 2000 kept prices trapped in the 600-620 range which has plagued this index since the middle of March - this could still go either way and should be considered trendlless. Bulls will be watching the S&P for a potential bear flag - although a loss of Jan-Mar lows would be of greater signficance to the bears. The secondary indicators remain little changed from before. The attempted bullish crossover in the $NASI looks set to fail. I still believe we are close to an important (tradable) bottom. When the $BPCOMPQ hits the low to mid-30s will be the time we see this bottom in place.

Breakout failures: ADRX featured for March 11th clipped its stop but ended Friday on a bullish hammer. CNF featured for October 6th but dived on Friday to hit its stop after earlier gains of 14%. RNDC featured for March 29th but still looks to be consolidating.

Breakout targets met: ANX featured for March 22nd hit its target price for a 57% return.

April 6th: The bears made their presence felt. The tech indices [NASDAQ and NASDAQ 100] ended on inverse hammers, although given slow stochastics are not overbought the significance of such candlesticks is reduced. Resistance at 20-day SMA was the key supply point for today - if we see lower prices tomorrow then we have to watch for a test of the lower BB band in each of these indices. The semi-conductor index and Russell 2000 closed near the lows of the day and remain range bound. The S&P and Dow struggled at its near term highs. The only key indicator of note was volatility as it is fast approaching a triangle apex and its next move will be interesting.

Breakout failures: CGIH featured for Nov 30th managed a 56% gain at its high before retracing back to its stop price. BABY featured for Mar 14th hit its stop after some erratic trading.

Breakout targets met: none

April 5th: More of the same in the markets. Upside on 'higher' volume in the tech indices [NASDAQ and NASDAQ 100] - technically accumulation - although overall volume was below average. Bullish divergences in the MACD trigger line continue to hold and should be watched for continued strength. The semi-conductor index finally reached oversold levels in slow stochastics as some observers watch for a reversal head-and-shoulder pattern - should this come to fruition we must see a bounce soon - a drop below 400 would jeopardise this reversal pattern. The Dow continues to map a bounce off its 200-day MA, although today's gains were on lower volume. Bears are in control (as marked by the numerous distribution days) and this could bite this index in the butt as a sideways consolidation develops. The S&P has suffered a string of distribution days as it tests January support - although the 200-day MA still looks a more likely support level. However, price is always your lead and for now 1,163 is your buy point (1,159 is your sell). The Russell 2000 is in an ideal swing trade position. Trade Tuesday highs/lows with a stop on the opposite side depending on the direction of the break. Upside target is 640, downside target is 570.

Breakout failures: CDR featured for Mar 21st closed for an 8% loss. EGSR featured back in July closed for a loss after running up a 70% gain at its high. MEOH featured for Mar 23rd clipped its stop intraday but closed on a bullish hammer. QSFT featured on Oct 28th finally reached its stop after earlier gains of up to 18%.

Breakout targets met: none

April 2nd: The short covering rally quickly succumbed to short and general selling. Higher volume clocked in further distribution days on all markets. Inklings of support are marked by bullish divergences in the MACD trigger line of the NASDAQ and NASDAQ 100 which held up in the face of Friday's selling. The MACD trigger lines in each of the tech indices are fast approaching an important junture when the December bearish divergence converges with the January bullish divergence - watch the resulting breakout for a direction the next market swing will take. The Sox is not providing much help with respect to a tech move as it remains trapped inside the 38-62% retracement area of its January-March rally. The Dow managed a firmer test of its 200-day MA than its original attempt earlier during the week. Monday will be interesting to see if it can maintain this support. If not, I like the look of the lower support line of the broadening wedge which currently lurks around 10,000 (it only feels like yesterday when CNBC were touting a Dow close over 11,000). On-balance-volume for the Dow is firmly bearish although an insipid bounce is developing in its slow stochastics. As for the Russell 2000 I still like the measured move down which will create a downward channel for the index - the target of which lies close to the 200-day MA of 595. This still looks to be a good area for an aggressive buy. The S&P managed to make its bounce off 1,163 - but a better test looks to be the 200-day MA at 1,151.

Breakout failures: AFFI suffered from its low liquidty, featured for March 30th. PLA featured for February 10th continues to 'sell on the news', hitting its stop intraday on Friday.

Breakout targets met: none

DD as always, DJF

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