July 21, '04. "Attention KMart shoppers..."


Unlike retail merchandise, there is seldom any value found in marked-down stock index goods when a bullish trend is indicated. Contrary to your emotions, the best buy is almost always the more expensive one, and is also the one giving you the least opportunity to get in. Today's early trade opportunity was just such an example. The SMH kicked off the opening with the largest gap up of all the indices, but when it came to marking down price, the mini-Dow showed itself the most reluctant. While the SMH was busy selling off to close it's gap, the YM was unable to even get below it's opening price. Which one was the better buy at their respective support points? The better judgement was proven by the resulting reaction. Clearly the one showing the least discount was the better buy. But you'll never hear that coming across the intercom while shopping the isles of your favorite discount store. Study the attributes of leadership and relative strength in the manual Pivots, Patterns and Self Recognition.