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On Friday I posted that we were in Day 1. Below are my updated thoughts and some comments on my Friday comments by Db and Mark. This is an excerpt from my post on CMGI's board.

Vic

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Where we are in the Day count is fuzzy. I was fairly sure of myself on Friday. No more. At least, I should probably have called Thursday "Day 1" (I discounted the last so called FTD last week). But it's more confusing than that. As usual, Db probably has the best view of the situation. Below are posts by Db and mkunka.

mkunka (Mark): <<Using the Dow, this latest short-term rally started on Thursday, so today is day 2 (if you can actually apply this to a trading range that bottomed in January). But what really matters here is that we actually break out of this trading range. The S&P has been here twice before and we got stuck each time. Ideally, the S&P should follow through into new high territory. If it goes weakly into new highs or distributes like it did before, then the rally is unconvincing.>>

Db's 1st post: <<I agree with Mark on this point. I'm also wondering if the FTD idea even applies here. It clearly applies after a major correction affecting all markets such as that which we had in the fall, but the only average to have a V correction has been the Naz, and none of the averages are at a "bottom" by any definition. This may also account for the nature of O'N's comments.>>

Db's 2d post: <<In my first entry in the previous post, the "V" bottom I'm referring to in the Naz is the first, no-fooling-around decline which ended on 2/18 and which was followed by FTDs. The fact that we came within a few points of a new bottom two weeks later suggests the possibility that (1) the FTDs were false signals or (2) the concept of FTDs shouldn't have been applied in this case at all since all other indexes had been in two-month bases. In other words, the fault may not lie in the FTDs, but in our application of them.>>

Regarding Db's point, that the FTD may not apply... perhaps. The Naz is certainly down from a high. Its intermediate trendline changed fairly radically from up to down. I assumed that for it to change from down to up we would normally see a FTD. I discounted the last one because it was weak and performance afterward was weak. However, I was not focused on the level Dow and SP500... so again we are in a grey area where the indices are acting significantly different... and therefore sending a mixed message about the market.

Considering that the Naz is driven by megacap techs, if we isolate them, there may be no significant "down" to consider... thus invalidating the use of the FTD.

OK. I give. I profess to being confused. If we ignore FTD's then we just look at stocks for good bases and buy on our buy rules.

That said, I've decided to accept some risk that I normally would not accept, and buy into a couple of net stocks that have set themselves up for a jump. The additional risk I'm taking is from buying them before I'm certain of market direction. I've learned that these stocks do not wait around. They go from base to massively overextended in an hour. So I'm buying them now. If I want to play these, and I do, I see no other choice. Stops are in effect.

Barring the market tanking Monday morning, I'll begin to buy back in on Monday.
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