CBOE Internet Index (chart 1)
XOI OIL INDEX (chart 2)
CBOE Internet Index: Not a
lot to like about this chart. Since peaking in April, the Internet
index has mounted 2 rallies, both with lower highs and lower lows than the
previous rally. If the Internet stock's rally since the August lows
is to be the start of a new leg up, rather than just a dead cat bounce,
the index needs to take out both the early October high of 559 and the
August high of 580. Index needs to remain above its 55 week moving
average which has provided support since August.
XOI- Still has
potential. The index's early October selloff stopped at the 38%
retracement of the February-September rally at 480, an encouraging sign.