Word: dow
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...stick with me while I take a chart gazer's look at the Dow. It's in a classic "pennant" formation that in the end tells us nothing about whether the market is going up or down but leaves us with one valuable tidbit: we're due for a breakout--soon. And when it comes, up or down, the market should continue in that direction for a while...
Naturally, even technical analysts can't agree exactly on what the Dow chart is saying. But any amateur can see that since the start of the year, virtually every Dow rally has stalled just short of the previous high and sell-offs have abated just short of the previous low. Draw the lines, and you get a sideways triangle, or pennant shape, that reveals schizoid investor psychology. On one hand, investors do not believe the market can sustain a rally--so as stocks near their previous highs, sellers charge in early to beat the crowd. But investors...
...descending? Let them quibble. Suffice to note that as the range narrows, we get closer to declaring a winner in the bull-bear tug-of-war. A textbook reading, says Richard McCabe, chief market analyst at Merrill Lynch, is that by late August, the pattern will be broken, the Dow's new direction evident...
Curiously, some technicians put more weight on the Dow's inability to rally past old levels than they do on its ability to hold firm on declines. Hence they tend to be bearish. The NASDAQ slide since mid-July bolsters that view. And McCabe notes that speculative fever remains high, evident in a vibrant IPO market. John McGinley, editor of Technical Trends, worries about the recent slide in margin debt--money borrowed to buy stocks. You'd think a decline in that figure would be healthy, signaling that investors are more cautious. But McGinley reads the decline from the March...
...included in the fund. The picks are ranked and filtered through computer programs to determine if they should be added to the portfolio. A big stake in selected technology and drug stocks, bought late last year and in early 2000, pushed the fund's returns past those of the Dow, the NASDAQ and the S&P 500. This year, StockJungle.com's Community Intelligence Fund is up nearly 22%. Not bad for a bunch of amateurs...