CRDN I didn't read the news as to why it fell. Seaonally, it's supposed to have a nice run from June 27 into next month. So, I think the play is to hope to get at least .50 back on it. This is why you have to read the news along with the technicals. They lowered guidance bigtime. So, it's probably hitting a low here. But that doesn't mean it's a strong bounce play.
Get out as you get close to .35 to .50 if you can. WDC is a different story. It so obviously wants to fall. It's got serious trouble seasonally as you saw by that chart. What I think is holding it up is the funds who own it and end of quarter 'window dressing' as they refer to it. For those who don't understand, investment firms and money managers make commissions on % gains of their holdings. They usually charge those either monthly or quarterly depending on the size of the firms. They all work together in this. As quarter comes to an end, like it is here in June, all they need to do is keep the market up to show large % gains and thus allowing them to pull out money of the capital base.
That's why the selling was so severe in the fall. Because of the forced selling, as many of these firms tried like hell to buy the dips and prop the market, they kept getting sold into bigtime. Well, that then leads them to hedge by selling other stocks in same sectors, or even sell themselves.
Because 90% of the money managers out there invest long, not short, it's why you can't listen to anything anyone says on CNBC. Most are professional money managers who have invested interests in proping the market at all times. For example, Vince Farrell I don't think has ever said anything bad about the market. Every selloff was a buy opp. All the way down from 14k on the DOW. It becomes a joke after awhile.
And of course, we all know Cramer's record. Those that don't, trust me, you don't want to follow him.
As for what WDC should do, if I'm right about the end of quarter and the prop ups in these stocks, the first week of July should be telling. Seasonally, the market gets a first couple of days pop, then an overall decline into the end of the month except for the drug stocks, which rally hard.
Then Aug is a potentially big rally month. Could see the DOW run to 9k+ in Aug. SPX 1000+?
Here's an excerpt from tonight's cycle update:
Stockmarket Cycles update for Thursday, June 25
Tomorrow's market close is critical in our projection work. Any sideways to up close tomorrow would confirm higher nominal 10 and 20 day projections for the Dow, the S&P, and the NY Composite. Those projections would call for a move up to closes of at least the following numbers:
S&P 500 937.10
DJIA 8612
NY COMP 6037
Those projections have not yet been confirmed but as noted above, they could be confirmed easily tomorrow. There is no doubt that the technical evidence is somewhat contradictory on several fronts. The sentiment figures released this morning by the American Association of Individual Investors showed only 28% bulls and 49% bears. As a general rule, these readings should be rated bullish on a contrary opinion basis. But we should point out that even more apparently bullish figures were seen on January 1 of this year, only 24% bulls and 55% bears. As it turned out, the S&P 500 declined 21% over the next nine weeks.
For those of you would believe in the concept that retracements of market moves tend to resolve at Fibonacci retracement levels, there were some interesting numbers today. For the S&P 500 a 50% retracement on a closing basis would call for 919.63. Today's close was 920.26. On an intraday basis, the .382 retracement level is 922.55. Today's high was 921.42. On the Dow, a .382 retracement calculates to 8496. Today's high was 8490. On the New York Composite Index, a .382 retracement level would be 5907. Today's high was 5911. Finally, on the NASDAQ Composite, a .618 retracement level calls for 1832. Today's high was 1830. Those could, of course, all be coincidences and the market could easily break through those levels in the first hour of trading tomorrow, but it would not surprise us if we saw some kind of high form around the market close today
AI
