Steve, I can't answer specifically for wahz, but what I suspect is a mix of...
Very oversold readings by some metrics (and specifically ones he follows, I bet).
Prior patterns based on a slew of indicators.
His FA view on the semis.
And, in short, the coiled spring concept.
Certainly sustained up from here seems more likely than it did at the end of the year, when you look at stuff like that. Whether we've created enough fear is not truly judgable. But we'll see if folks start getting out of longs on the way up out of fear ... as opposed to now trying to nail the bottom.
Personally, I'd still like a little lower, but today's selloff in the naz was good. We're within a bounce range, but I wouldn't mind 1980 or lower for the 200 dma test. Might as well. Semis, too, would be nicer with a spike low. I would say, though, that with anything other then the shortest of timeframes there are probably a lot of things to buy here.
Ye, there are some negative things on the charts, but if you look at this in the context of correcting the run from August, it's not as dire. The weeklies could correct with some sort of reversal this week and followthrough next. Something could rescue the bios. Etc. Etc. And while I'm looking for lower, I won't be quibbling if we reverse here (though it'll take more than a feeble bounce tomorrow for me to think reversal. I'd much rather a spike down reversal some day this week).
We'll see. I still expect a run from this week, but my view much beyond that is muddied til I see the bounce.
the freep
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