I see the point you are trying to make, the trend line at 934 is important but 200 days MA 927 is more sure a support..Trend line is one of the many tools you should rely on that is not the ultimate tool and as far as we don't see that 25 days i-timer below 13 we may see these sharp downward tests just a kind of quick movments to run the supports..
On this double top I would think that one needs to look at the chart real hard, if you see the first break-out with high of 1347 and close of 1332 on 3/10 we have seen six lower highs with a low of 872 on 4/14 and a new low of 853 on 5/23, now the double top you refer too or the article you have posted is a suspect one if you take the whole cycle, as far as 1273 on 6/21 and 1269 on 7/18 are concerned for me until the 927 is taken out this is very much within the wedge formation albeit we are right now testing the lower limits of the wedge, ofcourse if we break that 927 area we will be testing 880 area and even 815 from where we will bounce very strongly..
You may ask me why? for simple reason strong economy will produce strong numbers ultimately, the productivity gains are good, the companies this quarter came ahead of numbers and this sell out is based on rev short falls and future prospects but in the process we have seen some eal serious write off of capital base in stocks like TXN LSI and ATML, the market will build up this news very soon, the upcoming FOMC will be a cause of higher volatility but overall you will see that test of supports would be successful, inflation is feared and economy with unemployment is low but if the numbers does not show it you cannot creatre inflation, so fear based selling always leads to new oppportunities..
As far as your 6 ATML calls are concerned kiss them good bye for Aug, 37.5 is too far out if you can get 1 out of 3.5 you paid is good enough, the balance set it off against market education or paying dues as we call it..MCD Mar 35's can be a good bet.. regards |
