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Yo Hero


I have to make this very brief today because of a prior commitment. I did however make a commitment to you that I would graphically show some of the widely followed sectors that are the focus of Wall Street. All three have different patterns that manifest the underlying weakness in the market. So far today, everyone is telling me that it is getting close and that they are getting ready to put some money to work. THAT is not how an intermediate-term low is normally formed. I for one am waiting until I get a bit closer to a green light from my trusty intermediate-term indicators that have served me well over the past couple years.

The one thing I can assure you is that there is more going on than meets the eye. I can't put my finger on it, but the Iraq topic isn't the only thing weighing on stocks. One thing is for sure, the catalyst to move the market out of the doldrums probably isn't Iraq, because that is so obvious. The hardest thing to do in a bear market decline is to avoid the temptation of being a hero and making "the" call instead of waiting for a reason to call the low. Patience will be the key.

Anyway, here are the charts;

Exhibit 1 - The Semiconductors are clearly in a downtrend channel.

Exhibit 2 - The Banks just broke down from consolidation pattern

Exhibit 3 - To round out the fun, the Trannies just made new lows.

Source; Baseline, Inc.
position SMH and SMH options
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