A comprehensive post by Lee on the Stock Attack thread last night:
To: L3_aka_L3 who wrote (36887)
From: L3_aka_L3
Friday, Dec 1, 2000 3:15 AM ET
Respond to Post # 36908 of 36912
By L3_Aka_L3 on Friday, December 01, 2000 - 03:03 am: Edit
Still pretty busy and not quite caught up yet but here goes.
Some people on SI have brought up a few targets of mine or else addressed a few things I have looked into so I
will address those first. a month or more ago, I was targeting some cycle lows around end of this month to the
beginning of December. It was so far out it was hard to time too accurately. The DOW cycle still is aiming for early
December but the NASDAQ cycle appears to have already hit last Wednesday. I was hopeful that was a bottom
signal and many of my other indicators or targeted prices were hit and that is how I took it. The past few trading
days however seem to be threatening to make this an inverted cycle since the selling has accelerated since that time
and the trading range we were previously in may have been the inverted up cycle event. There is always the
possibility that my cycle is off a bit and the cycle low in the DOW proves to be the true low but I am not betting
too much on that. The NASDAQ longer term cycle hit last week and we are about 2/3s of the way up on the mid
term cycle which should hit late next week or early the follwing week. Basically I don't expect much from these
cycles now and am looking at other indicators for signals although I am still watching the DOW cycle.
The matter of the VIX has also been brought up today on numerous threads. Some people are stating that since the
VIX is not derived from the NASDAQ but from the OEX, that it won't spike up to give a bottoming signal. While
in theory that is indeed true, a true capitulation bottom of selling in the NASDAQ should produce "throw the baby
out with the bath water" type selling and thus the other indexes should drop also producing a VIX spike. Of course
this is only my opinion but I do think we have not seen real selling pressure yet. The generals of tech have only
begun to drop and valuations are still obscene on many of them. Also today's VIX spike in the 30s is not that high.
We were higher last week and using the 35 high from before and the retrace to 26 gives me a fib 1.62 target of 41.
I expect to see at least that before a true bottom is made.
Don and I both used differing methods when we spoke Wednesday but still both came up with 2250 target areas
for the NAS. Today didn't even break 2400 so while anything is possible, I am still aiming lower. Some of my
targets have been hit on some big tech names and supports seem to still be holding for many of the ones that have
already been hit. I still think we need to see capitulation in the big names and the Mo Mo stocks that the maniacs
keep buying on dips.
I was waiting for the COT report this week suspecting that they covered last week during Wednesday's
downspike. In light of this week's action, while I still like my reasoning for thinking that, I doubt they missed out on
this drop and even if some of them did cover, they probably re-initiated those shorts on Monday or Tuesday when
the election stuff was not resolved and problems started re-appearing in the market fundamentals.
The new lows showed close to the targeted buy level but not quite. My short term technicals on my high low chart
are close but are not quite there and the mid term technicals are still far from buy levels using that indicator. SO
basically, no buy signal from the high low charts for either the NYSE or the NASDAQ.
Now all this said, I still think we are closer to a low than many think. 2250 is not that far away nor the 1274 SPX
target. Another down day tomorrow would possibly produce a hi low buy but futures are up right now and the bias
on GLOBEX triggers is also slightly up so I doubt we will get that selling unless the NAPM or employment
numbers come in really bad.
I am seeing some bargains and am dipping here and there selectively. Someone on SI also asked if anyone was
getting hurt as it appeared everyone was hedged or short. I will say openly I am getting beaten up on one issue big
time. I bought too early, missed my stop due to work and refused to sell at a loss thinking the selling was almost
over. Stupid move. Thankfully this was planned as a long term investment based on FA and was not a trade. (
Sounds like J6P huh -g- "it's a long term hold" -g-) I am actually adding more down here and will keep adding.
I did have some low ball bids in today on select issues and index tracking stocks but missed on all of them except
some calls on a speculative play that is already up and will most likely dump on the open.
I will need time this weekend to get caught up on my charts, news and FA. My hours this week got me all out of
sync so I have low confidence on most of my targeted plays and thus will not post them. I do still think these
defensive buys the institutions are doing are stupid. Anyone seen KO's PE lately for sugar water? BA losing
contracts and still keeps climbing despite them not being able to walk and chew gum for the past couple years?
Banking stocks climbing while there is record bad debt risks? Tech is starting to look good again if one stays away
from the high flyers.
Again tomorrow we get the NAPM with estimates in the 45 - 47 range which means a slowing economy, we get
employment numbers and of course we start the Supreme Court hearings on the election mess. Audio will be
released on the hearings and should be interesting.
Good Luck,
Lee
EDIT I see there are no employment numbers this week. There is a truck sales report though that could make GM
interesting. <ggg> |
