From: Jeff Bone (email@example.com)
Date: Mon Sep 25 2000 - 20:53:17 PDT
I brought this hell on us. I mentioned over the weekend that we'd been
bottom testing but that I shouldn't mention it or we'd shoot straight
down. Goddamn, I hate it when I'm right.
Crossing fingers for a close to the top and low volume.
> Jeff wrote:
> > Help!
> > WTF?
> > So we have support or not?
> Not. Support gave way today when CMGI dropped below 33 1/8. So
> technically, it's back in a downward trend. But these institutional
> players are a savvy bunch; they often will temporarily break a major
> support to frighten investors into selling. I usually give it a day
> or two to see if we close back above this level, indicating a
> shake-out rather than truly intended institutional selling.
> Admittedly, it would be more encouraging if we had closed above
> support levels and if volume were lower today.
> CMGI stock is actually close to support levels established in
> August '99. If we go further south, that could trigger quite a lot
> more selling.
> On the positive side, even though the stock has continued to drop over
> the past 2 weeks, volume of selling is actually declining. That means
> that CMGI is getting close to prices where holders are refusing to sell
> (supply is drying up). That is good. Institutions often "test";
> that is, they drop prices down to see how many sellers are left. They
> will usually not start driving up prices until all the weak sellers are
> out of the way. Most downward trend reversals will have this sort of
> test, where the prices are allowed to drop, then followed by either
> close near the high on that day or the day following. Tomorrow will
> determine whether this was indeed just a test. Look for a close higher
> than today's and on low volume.
> What to do? Probably just wait and watch. It doesn't make sense to
> sell when selling pressure appears to be easing. I've often found
> playing contrarian to emotions is a good strategy....but if we break
> below today's low on high volume, this will seriously needs to be
> reconsidered ;)
> > What's the driver, here?
> None that I could find. That's often the case. As small investors,
> we're the last to find out about news. Which is why technical
> analysis is helpful: it shows what institutional investors are
> doing, before news is made public.
> Just tuned in briefly to check and this looks like a day
> > from hell.
> Actually, it's not so bad. We may well retrace some gains from Friday,
> but many important Nasdaq stocks (the 'pillars' of Nasdaq, like EMC,
> ORCL, SUNW) actually held up quite well. Much of Nasdaq's decline
> comes from a few heavyweights like INTC and MSFT. The next few days
> will be telling.
> Please tell me this is all stop action that's going to go away
> > tomorrow.
> I still have a small position (not by choice!) in CMGI, so I'm
> watching closely. Other positives are that most other incubators
> fared poorly today, so it's not CMGI specific. Also, I believe there
> is probably some tax-loss selling and window-dressing going on with
> the fund managers this week. Unfortunately, CMGI would probably be
> a prime candidate to get tossed. Often that leads to some
> bottom-fishing the week following....
> Hope that helps, Jeff.
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