Is anyone just a bit nervous? Hey, I know I am. I mean, you don't have to look far for trouble signs, just eyeball our sturdy
Prom Queen Portfolio
. Shoot, we were breezing along at a 25% clip and then, ouch, Wednesday hit. Hmmm, back to 13% year to date. Still, we're kicking the scrawny butt of the
Nasdaq 100 Trust
, which is limping along at a meager 8.6%.
All that's history, though, as the next few weeks are going to be the real Prom Queen test. Let's hope sentiment wins the day.
And speaking of tests, remember that
Internet HLDRs Trust
Biotech HLDRs Trust
vs. GBS test? Hmm, so far I give us both a big fat F. BBH did exactly as I
suspected, but HHH? Well, there was always the possibility of a double-top, and shoot, there it was. Hey, but I did bat .500!
Oh, one more test: the acid test of knowing which is more important -- golf or trading. When you saw the headline, "Tiger Fund Closing," did you immediately think of Tiger Woods or Julian Robertson? (Me? I'm guilty. I thought of Woods!)
Anyway, a few charts to noodle on this weekend, and then I'll wrap up with "email of the week."
Exit Point for Echelon
Gary: This is my very first request: Echelon (ELON) ... please. Anthony
Adios Electric Fuel
Gary: It's time to chart Electric Fuel (EFCX) !!! It is at a very interesting time for the chart!!! Steve
Gary: Although I know you cannot recommend a investment/stock picker newsletter, are there 2 or 3 that are recognized as the most widely followed or accurate? Is there one that is considered a "must read" by professionals? How about George Gilder's Technology Report? Do you know anything about Mark Skoussen's letter or the Cabot Internet letter? Samuel
Samuel, I have to profess ignorance regarding the newsletter market. I'm sure there are some good ones out there, but frankly, I've always been a "roll-your-own" kind of trader.
That said, I will share with you the only newsletter I read, and that's one put out by Robert Drach, called
Drach Market Research
. Drach has a unique method that views the market as one big oscillator, shifting regularly from greed to fear. As an example, he shouted "buy" for many of the
stocks just before the
made their monster moves earlier this month.
However, he's out of the market for large periods of time, striking only when the timing is optimal. Still, he has an enviable track record, with nearly 98% winners.
Keep in mind, though, I don't trade his methodology, but enjoy his writing and his take on the market. Good stuff, and if you're interested, he can be reached at:
Drach Market Research, P.O. Box 490092 in Key Biscayne, FL. The zip there is 33149. The phone number is 305 860-9658.
Nothing Is Sometimes a Good Thing
Gary: I have a bigger question, which I'm hoping you'll address in a column soon. I enjoyed your piece about having a plan. While biotechs were only a small piece of my pie, that piece got uglier than it might have had I had a better plan. Here's the part of the plan I don't get: OK, so I take some money off the table when I've made more money in a stock than imaginable. Then do what with it? Build cash in a roaring market? Put it in "blue chip" plays? I'm not sure where you were suggesting folks go with that money. I'm looking for generals, but examples are always helpful, too. Doug
You ask an interesting question, but I have a simple answer: I do nothing with the money other than let it sit in my broker's money-market account.
Now, understand where I'm coming from: I regularly cash out both long- and short-term winners and losers. And the flip side is that I regularly invest in new long and short trades. Therefore, I'm constantly turning my "inventory" of equity. (Sometimes it's more like churning, but that's another story!)
Given that, the only time I have cash sitting around is if I have no good trades. And in that case, what the market is begging me to do is sit quietly and do nothing. In fact, doing nothing is a positive course of action, and one thing many traders neglect. They feel they always have to "do something."
So, my advice to you is the same: If you have no good trades or investments to do, then do nothing! There's a time for action, and a time for sitting on your hands. It's the nervousness about the latter that gets most folks in trouble.
DNA is DOA
Gary: Any chance you can pick one of my favorites? I like Genentech (DNA) since it's maintaining its long-term uptrend. Thomas
Kana Looking Grim
Gary: What's your take on Kana Communications (KANA) ? Big downturn, but is it ripe for an upward explosion? Carl Bauer, Jr
Email of the Week
Everyone else was fighting for second after I read this one.
Gary: I have read and appreciate your technical analysis on many chart patterns. However, I am concerned that you never have anything good to say about Metricom (MCOM) . I personally think you are losing credibility with many of your readers who are long Metricom. How can you not write about a company that will cover 100 million people at 128 Kbps in the near future? Metricom's MDMS technology is important and warrants further research and study by you and your readers. It is a very important and powerful technology because of its ease of deployment, security and operating margins. In your recent article on "Wireless Modems Rock!" you seem to purposefully avoid Metricom. Enough already on how a 19 Kbps modem rocks! Cover the bases pal. All the bases. This will add to your credibility. I know Cramer runs a hedge fund and it is obvious you folks are short. I know Paul Allen well enough to know he is 100% behind Metricom, and I am certain his deep pockets will crush the shorts. I would change my tone on Metricom and be more objective because I personally know that several people are changing their tune towards you. Me being one of them. Sincerely, Concerned investor
Folks, what can I say, it made me laugh. But, if you're either "concerned" or Paul Allen, maybe you're not laughing. Metricom was down another 24% through Thursday at noon. There, I think that covers all the bases.
And that does it for yet another week. A week where Duke, two Tigers, and the Prom Queens took the gas. So much for favorites!
Gary B. Smith is a freelance writer who trades for his own account from his Maryland home using technical analysis. At time of publication, he held no positions in any securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Smith writes five technical analysis columns for TheStreet.com each week, including Technician's Take, Charted Territory and TSC Technical Forum. While he cannot provide investment advice or recommendations, he welcomes your feedback at