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Strategies & Market Trends : Tech Stock Options
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To: Stoctrash who wrote (43968)5/27/1998 10:02:00 PM
From: SE   of 58727
 
I have been reading that this was a reversal day. I somehow am not buying it. Normally a reversal day has abnormally high volume. I have been trying to find volume records to see if today was abnormal, but I don't find anything. Normally a reversal day occurs after a large run-up in price or a large downtrend. I am talking about an extended period of time....I have not seen that to the downside either. We are only 4% off the of the highs in a few weeks, hardly an extended downtrend. Finally, one day reversals are not major trend implicators in that we don't go straight up or down after a reversal day. Normally there are several days to weeks of choppy action and chart building before a return to a trend.

I think we will probably re-test the 1100 level on the SP8M. I think we might even go through it, but not on a closing basis. I think the market will be heading lower over the next couple of weeks. This was not a reversal day...it was a day of breaking through the 50 day EMA and then pulling back to it to re-test....it will not hold.

The OEX closed above the 50 day EMA, the DOW and SPX did not. I don't know why the OEX closed above and the rest did not, but I would presume it has to do with some stocks that are included in the OEX that are not in the DOW and less weighted in the SPX.

In any event this market is still sick and getting sicker regardless of today's action. A test of 1100 on the SP8M should provide a good shorting mark.

Just my two cents!

-Scott
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