A hectic week, right? And now we have to do it all over again Monday! So, which way will the market head? Let's put it this way. I'm out of my
short. (See Friday's
column for the chart on DIA, a security that tracks the
Dow Jones Industrial Average
.) But, I still have plenty more on my ledger. Bottom line: a mixed bag, just like the rest of this nutty year!
Want to set me straight? Hey, I'm always willing to learn. Send any and all to
Before the questions, though, a brief follow-up to last week's
poll, in which readers by a 4-to-1 margin said I don't move stocks.
I think you and your readers underestimate the potential effect your GBS Method columns could have on stock prices. While there won't always be a unanimous opinion about every potential candidate, one could expect a strong consensus on textbook charts. If an average of only 500 people (the GBS Board on Yahoo! alone has over 500 members!) trade an average of 500 shares each, that would generate 250,000 shares of activity moving the stock in the same direction. While that may be a drop in the bucket for something like Cisco (CSCO) - Get Report, it couldn't help but have a significant effect on a stock trading an average of 100,000 to 300,000 shares a day. With your TV exposure and the increasing popularity of
, the GBS effect can only be expected to increase. -- Rick Marianetti
Hard to Rate Rookies
I have to admit, at first I tended to skip your section, but now must admit I look for your next "writes" every time I pop up
. I never buy without first searching the recent archives for a GBS look. That said, what would you make of the chart on Tibco Software (TIBX) ? Steep fall after the initial public offering, with just as steep a run back to near highs. Also lots of volatility on the dailies. Just out with 122% increase in sales over the third quarter of 1998, and it beat estimates on earnings. What do you think? -- Kevin McMinnville
Return to Cendant
As always, instructive charts and commentary. Cendant (CD) , the poster boy for bad behavior, has turned around this past year and taken a number of shareholder-friendly steps to ease the fears of large funds. It still has outstanding suits, but they should be resolved this year. The chart shows meandering prices for two months with congestion during the past six weeks along with fluctuating volume. Your read about where it goes next? -- Charlie Cameron
Freddie's Not Dead
Fannie Mae and Freddie Mac have suffered because of the rising interest rate environment, but I've read several articles by people who think the pullback was overdone. What do the charts say? And, by the way, are you planning an end-of-the-year retrospective to see what your hit-miss ratio is? -- Dan Mufson
An end-of-the-year report card? Maybe, but only if I think I can get above a C! Here's FRE.
Tried to watch "TheStreet.com" TV show this Sunday, but they must of changed the schedule here in Seattle. I will figure out what happened. By the way, the show has improved a lot; you guys seem to be pulling it together. Congratulations! My question: What is trading like in a bear market? I have been trading only for two years, so I have no idea what to expect when the big bear hits. I have imagined that all you do is short stocks all the time, but I suspect that is wrong. Is growth just slower and stocks move up more slowly? Or do they just move sideways? I am not sure if your trading predates 1990, but if it does would you give your insights? I hope my question does not sound too stupid. -- Ted Karas
Your question doesn't sound stupid. It sounds brilliant, and it's something few people have given thought to. Even worse, it's something few people have experienced. I could speculate, of course, but I only date back to about 1987 or so, and even then my style was more buy-and-hold than anything else.
Who I'd like to hear from are folks who traded in the early '70s. Now there were some bear markets then that would scare the bejesus out of anyone! If they made it through those times, it's a lesson I'd like to both learn and share.
Don't Go Nuts on TUTS
Tut Systems' (TUTS) 180-day lockout period expired in July, and the stock went down by about 50%. The stock has not recovered from the insider selling. (It was in the 30s and 40s, but now can't get out of the 20s.) Can you look at the chart and indicate when and if a rise in the stock price may be expected? -- Mike Maguire
Could you please lend your expertise to eBay's (EBAY) - Get Report chart? eBay's fundamentals don't seem to play a role in the stock's price; it seems to move on strong momentum swings. I am short this stock at 150. I am worried about the strong volume just after eBay bounced off its bottom. -- Jeff Brook
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