Some additions to my previous message..
Goal posts cannot be allowed to keep changing, the break yesterday was in line with our expectations of failure to stay above 50 days MA on Comp and NDX i.e 2512 and 2131. SOX DOT and PSE are still above my supports at 402 564 and 535, however 1230 level on SPM was difficult to hold. May the Mr Poole punctured the formation, however I will stick to my post of June 7th, the parameters of the post apply strongly andI continue to follow those ...we have all the potential if we stay weak to go and test old lows this will synchronise with economic releases, the indexes are still sitting at my supports like Comp 2475, this was highlighted in the same 7th June post and I expect that probably after a test of 2055 and 2455 area we may hold within a range until 11th the day PPI will be released.1318 remains the short term trading support a break could elad us to 1302 potentially, but watch out for a false break, also this moveof yesterday wherewe saw 50 days MA on Comp pierced would be technically a false upside break. In my opinion the Techs remains solid as far as SOX and PSE are above 405 and 535 area, also DOT will turn weak and may test 500 or even 450 area if 564 is taken out and 550 is broken on the second day we will go lot lower in DOT and Comp will follow inevitably. Poole and profite taking were two factors that lead to good solid selling however the fundamental picture remains the same, undercurrents of increasing demand leading to jitters in them market. In short term if I want to see where to get into a good tradeI would think that following NDX 5 days charts tells you the story the point is 2025-2030 area where if the gap fills and that may correspond with 1318-15 support of SPM we may see some buying....http://quote.yahoo.com/q?s=^NDX&d=5d . Probably same holds good for Comp at 2400 level..where we gap opened..
quote.yahoo.com^IXIC&d=5d, failure to hold these levels on two closing basis will take us through 1980 and 2360 area to a test of 2300 support quote.yahoo.com^IXIC&d=3mm with a potential fall as low as 2150 where you see the 200 days ma. quote.yahoo.com^IXIC&d=3mm DOT in such a case would be around 500 and 450. The formation of DOT and its inability to spook 600 target will lead to much stronger reversal quote.yahoo.com^DOT&d=1ym
We are at important point on most of the indexes and it may be possible that if CPI and PPi show strong numbers we may be in for some real test of lower supports before to bounce of a bottom. I think that bottom is the 2150 area on Comp corresponds perfectly with 450 area on DOT. All said the otehr indexes which will give you a forewarning will be still PSE 535 511 as a major support, SOX 405 and 392. BKX 820 looks solid rather i would think even 830 is a good support quote.yahoo.com^BKX&d=5d, let me take you back a little last time we had this CPI scare it ws in Oct 97 lets see how this interest sensitive index reacted... quote.yahoo.com^BKX&d=2ym for me 800 is solid support just below 820 if we break this 800 support we go lower to 750 area as result of this we may see DOW and other cyclicals suffering very heavily I see a target of 9200-9300 area for DOW a potential test of 200 days MA... quote.yahoo.com^DJI&d=2ym.
This is the story of this whole market at 200 days mA it is buy and at 50 days rebound it is a buy a break of the intermediate levels we will see BKX performance and take a cue. The lunatic fringe of 'bears' who have been shorting INTC AMAT TXN at 20$ 21$ 49$ has only one thing to say 'this market is not IS wobbly and has no future, I would say for last three years you have opened shop on SI with this same mantra every day we take you to cleaners like this Monday move where everyone was stopped out, now bring fresh money lets play new games, we need you desperately. Your money is cannon foder of the market. Come one shorts lets play games market will take you to cleaners again, the 'lunatics fringe of SI' the bears who missed and are in cash. The love of cash becomes the objective.. bi bi .. Market opens every day it is fluid and dynamic, come play it without prejudged approaches.
IQBAL LATIF on Jun 7 1999 10:14AM EST
Pits think that this thing can go up to 1350, if 1318 holds. NDX 2121 now two
closes above 2131 the 50 day MA we are in good shape. Comp 2497 and 2512
are intermediate resistance levels we get two closes above this we go to old highs of
2677.
If we break this on closing basis we go back to lows, we are in range, it is not a
break out still, the range once broken will give me an idea of the new direction. The
way individual stocks are behaving it looks these stocks want to go higher, this
looks like an earning driven rally, the market has built in .25% hike at the supports.
The leaders look good, the broad market should follow normally.
PSE 535, BKX 835 are also important to watch.
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