Hi Chip. Wow, it's been THAT long (Nov) since I posted??? Seems like yesterday! <g>
Hahn always sounds very bearish on the market.
However, he is looking for a trend change on the 24th. High or low - we'll have to see. He thinks a low.
I'll post a bit of his commentary from last night.
This page was updated on: Tuesday, January 16, 2001 7:39 PM
January 24 stands out as the best time to take new trading positions.
The rotational trade between Nasdaq and the DJIA reversed today with the dow stocks being
stronger than Nasdaq. The financial stocks were higher in spite of terrible fundamental news
for the banks, but then, had the financials not rallied, the DJIA would have broken down
through support levels and the collapse would have been damaging to “put writers”.
Regardless of what happens on Wednesday morning's stop run action, I remain bearish into
at least the January 24 time cycle.
One must be wary of the manifestation of the bullish potential in Nasdaq to plow through its
overhead resistance line on a quick gap higher run that triggers buy stops above overhead
resistance lines. That's probably going to happen tomorrow morning, as long as the CPI
number is neutral.The problem is we have been in a sideways rally since December 20. A gap
higher tomorrow is probably just a last gasp exhaustion of the three week rally and will not
be sustainable. The best strategy would be to use the January 24 time cycle time, which
is of major significance, to initiate new positions. It remains to be seen whether January 24
will be a significant high or low, but it will offer a higher odds trade.
The 60 minute chart of the SPX is shown below. The January 8 low to the January 12 high
projects to Tuesday, January 23 at 2:00 PM CST (two trading days past option
expiration....usually marks the end of unwinding whatever happened during options
expiration week.) If we use the January 3 low to the January 11 high, it projects to January
31 at noon CST (the day of the FOMC meeting!) Use that information to trade expecting a
trend change as a direct result of the FOMC announcement. (For example, if there has been a
run up in index prices ahead of the FOMC meeting, expect a reversal to the downside.) |
