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Strategies & Market Trends : Stock Attack -- A Complete Analysis

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To: Paul Shread who wrote (38131)	12/15/2000 12:00:11 PM
From: Robert Graham	Read Replies (2) of 42787

Yesterday closed below support. Today validated by gapping down and after a brief consolidation continuing down. This IMO is a negative sign. At least from the viewpoint afforded by the COMPX chart. When this happened, I saw its next target as the low put in a couple weeks ago. I know this is a little late. But I have my hands full. Anyways, I am inclined to report what I anticipate instead of predictions. The SPOO humbled me in this way. The market usually gives only indications on what it is inclined to do. This is punctuated from time to time with higher probability setups that come with unusual clarity. The trick is to waiit for this to happen. I am definitely not in the prediction game. But a read of the tape of key stocks during that last "rally" would of really told allot of the current picture. The big picture tells me that we have gone through an extended sell off that has turned into a longer term top. With this type of market, I would expect a period of basing before any headway of permanence can be made on the upside. Look at the COMPX daily chart. There I see a move down within a trading range after an initial sell off. Instead I see price moving up a bit, and putting in a larger double top which has resolved down. This was definitely a strong negative sign of things to come. I would also like to see capitulation which I have not seen yet. In some respects the fear in the market appeared to evaporate as quickly as it came. Some of the old patterns of thinking came once again to traders I have been watching, as though it is a bull market "after all". Here an implicit saftey net in the the minds of traders. In actuality, it was a time to be VERY cautious. IMO a bit premature to be placing bets for a move to the upside. Inverse H&S patterns I think work better as continuation patterns than reversal patterns. But I am open to discussion on this topic. Also someone here has mentioned that there would be continued reports of earnings shortfalls. That has beared itself out this morning. This feeds negative sentiment. As it stands right now, not a good environment for a reversal other than one of a short term nature. Bob Graham

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