When you're wrong ... you're wrong! And, as many readers pointed out to me, I was wrong-amundo about the
Nasdaq Composite Index
going to 4200. The reason: It's no longer a trend-line breakout -- it's a nasty-looking bearish wedge!
Oh, I know, all this mumbo-jumbo, flip-flopping, switch-hitting rationale is enough to drive someone crazy. But, look at it like this. Say on Day 1, Company XYZ said it received
Federal Drug Administration
approval for a new wonder drug. OK, that's bullish, so you go long. Then on Day 2, XYZ comes back and said the FDA approval is still there, but due to a lack of production capacity, the company won't be able to get the drug on the market within the next 12 months as promised. Instead, the first ship day will be 24 months down the road. Right, we have new information and decide the situation isn't so bullish after all. Now, could you blame us for flip-flopping?
No, of course not. Well, same thing, then, with new data on the charts: If new data give us a different look to the chart, we might need to change our view. And as volume has continued to tail off in the Nasdaq rise, the situation becomes more bearish, with me having to change horses as a result.
Now, what if the situation changes yet again? Then, I'll change yet again. Irritating, I know. But, probably safer that way.
OK, onward to the
Prom Queens. And boy, another swift move there by yours truly, as it appears I did dump them right at the bottom. Since that panic move, the portfolio has rebounded nicely, and is now up about 15%. That'll teach me to trade outside my niche! (You'll note the numbers below don't exactly reflect that. But, if you take our year-to-date tally of $597,000, subtract out our losses on
, and divide that number over our starting amount of $500,000, 15% year-to-date is what you get.)
And finally, a few charts to keep you warm and cozy until tomorrow.
And that, folks, ends yet another wild week. A week in which, quite frankly, I stunk as a technician! (Keep in mind, though: Even the worst technician is better than the best fundamentalist! Hoo-ha!)
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