Market Breadth Analysis 06/09/01


Legendary member
I don't like to mention this, but these charts suggest we are rapidly approaching a melt down. Is this the start of the next Stock Market crash? I think I'm going to cash tomorrow, on my few long term shares....
Doesn't anyone else have a view?


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Hi Martin,

yes it's basically grim but there are a few attractive stocks.

I do think that the TMT's are willl continue to have a hard time though some consumer related and defensive stocks still look strong. I will be holding albeit with tight stop losses...
Yep! I'm 97% cash, and with the ftse closing at a 3 year low I can't understand why I'm 3% invested!

The diamond pattern on the FTSE broke at 6100 and projected a move to 4900 - and according to Edwards and McGee this is a minimum move - it could be much more. There was in fact a false breakout from the diamond on the up side before it went, which emphasised the bearishness of it. I reckon it's going to get really ugly, but from each bear there is born a new bull!

Sit on cash - it's a really nice feeling at the moment.

It's been a long time since I stopped holding overnight, I still dont see any reason why one should risk his capital when it seems so uncertain...

We should let the US turn round before investing and till then only trading...

As for a total capitulation we need to see US indices test their year low first, I think it can go either way at that point

And The Nasdaq is 86 points from its intra-day low of the year set on April 4... the Dow Industrials is 734 points from its 2001 nadir reached on March 22... and Nasdaq 100 12 points from its lows of the year...

Methinks it will not be long until we reach it. One support level after another is being taken out. The good thing is that there is a fair amount of panic going on - though capitulation? Prob not yet....

Of course the rules have now changed. Ordinary punters can go short now - and make as much money as going long. As a result, maybe at times like this support is less meaningful than it once was.....

The gauntlet is truly with the bears, the bulls are panicking and in hiding....the volumes at these lows are big - though whether this indicates panic selling, or buying tthe dips, I don't know....

The trend is still in tact......hopefully this time that word "capitulation" will occur, in order to bring about a new dawn...

So glad i'm 100% cash and have been this past 2 months. I'm not experienced enough to try to make money in these markets so i'm just sitting on the sidelines waiting for the turnaround. Whether or not a crash precedes that turnaround, i don't know. But being 100% cash and seeing the markets tank is a nice feeling knowing there is no chance of losing money, whatever happens. Yet more carnage on the other side of the pond as i speak. As someone once said- be careful out there, it's a jungle!
I've now gone from 97% cash to 100% cash - Costain dropped thru the stoploss today, and a stoploss is just that! Now the lower it goes, the cheaper we'll be able to get back in. Just as we were amazed at how much an overpriced share could become even more overpriced back in 1999, now I think we will be amazed at how much cheaper an already cheap share can become. Marconi anyone?

Heard on news that Moulinex went bust today - first high profile failure of many I reckon. I just love that cash pile!
I don't know whether I'm mad or what...

I'm still 95% long and my portfolio was up by 0.5% again today. Nice rises this week on CNE, HTL, ETI and NAE. My OSH are recovering and I cashed in ALY today though OYS is looking a bit sick. Vehicle distributors need to bounce after pulling back.

I think that there are some other interesting plays out there too.
Shares held...

I had bought RTO at the beginning of the week only to sell at a small loss.

ETI showed signs of another leg up, so I bought on tues - the subsequent rise has only covered spread/commission, but I suspect there might be more to go there.

Otherwise in cash.