Zeev's Ideas

[Koikaze]

ZEEV, TECHNICALS - up to ZEEV:330397, 12/05/04

12/01: (328533) (*COMMENT*)
Zeev,

The distribution count, although mostly minor, is piling up here (major distribution in []):

NASDAQ: 6 (11/10, 11/16, [11/19], 11/23, 11/29, 11/30) S&P 500: 5 (11/10, [11/19], 11/23, 11/29, 11/30) DJIA: 5 (11/10, [11/19], 11/23, 11/29, 11/30)

Technically, any major distribution day (>1% drop in rising volume) before 12/9 would mark a breakdown day on any of the 3 major indices.

The last time we had 16 distribution days on the books without a breakdown (it typically doesn't go this low until AFTER a breakdown) was 7/28/2003. During that period, we finally got a breakdown (it was false alarm) on 8/5/2003. Then, the false alarm corrected itself with a NASDAQ follow-through on 8/18/2003.

Do we get the same "false alarm" breakdown here, minor swoon, then blast off?...
(*END*)

My problem with that is that this time there is a big bolus of liquidity injected by the MSFT dividend starting tomorrow. Since settlement is few days, and the dividend paid is immediate, it is quite possible we are seeing the effect already. I am still in a cautious mode and have a bunch of ask above the market,