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To: PAL who wrote (667)	7/18/2000 6:42:36 AM
From: Guardian	Read Replies (1) of 1115

from splittrader.com monday night 9:17pm: The CPI is slated to be released tomorrow and it should have a strong influence on the market. The pending release can partially explain today's dull market. The consensus estimate is for an increase of 0.4% for the month of June. A negative surprise that shows inflation increasing faster than expected could cause an avalanche of profit taking. A better than expected result should enable the market to keep moving forward. After having successfully broken out of its base formation from June, the NASDAQ has been able to string together several positive days. It does appear that momentum is abating even though the index has not challenged the next major resistance point, which is April's high just above 4450. Some more solid earnings coupled with a benign CPI and we could see a test of that resistance by the end of the week. Be cautious if the NASDAQ moves below today's low which is light support at 4215. A drop below that level and we could easily drop right back to the top of the base at 4100, which would not be an unreasonable correction of the recent move. We are also fast approaching a sell signal from the RSI, which is telling us that an overbought condition is near. The INDU continues to under perform. With a slew of Pharmaceutical and Financial earnings due later this week, as well as the Microsoft (MSFT) and Intel (INTC) earnings due tomorrow, look for volatility to heat up. 11,000 is fast becoming an important resistance level. We are fast approaching a time when you should be utilizing trailing stops. Granted we may see some volatility, which may take you out of your winners, but taking profits is why we do this. Sometimes stating the obvious is a necessary practice. Longer term it looks like we have safely put the correction behind us. That said we have probably hit the latter stages of the summer rally and we will probably see a slowdown in activity in August which will give the market time to consolidate its excellent recovery. Now would be a good time to start looking for some trading ranges that could give you some profits during a slower market.

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