By L3_Aka_L3 on Wednesday, February 21, 2001 - 12:59 am: Edit
As Don said, we are in over sold territory now and my target for the NDX is all but met. Our indicator is very close to signalling a buy and I would have to think that any down move at all tomorrow will do it as technically, it is already giving a buy albeit a very slight one.
As bearish as all the things that Don pointed out, one thing that we have to keep in mind is that the window of opportunity for a double bottom which had caused me to turn bearish when most others weren't, also has to keep us on guard against getting too bearish too early now. We could by historic means be putting in a double bottom although the odds of it are very slim based upon all the negatives Don pointed out, as well as FA for earnings.
CPI will be released tomorrow AM and I heard SUNW will be giving a scheduled guidance meeting Thursday. Just some things to keep an eye on other than the middle east.
I will be putting my kids in here tomorrow most likely unless the CPI data is extremely bad. Don and I talked tonight and both agreed that pretty much no matter what, the talking heads will try to spin the CPI report as positive. If it is low, they will say the PPI report was an apparition and if it comes out high, they will say the economy is bouncing and we will get our soft landing.
As much as I would like to see a double bottom here, I don't see much to support a strong move up. Don mentioned that we are nearing the end of month rally time frame and we both have cycle lows coming due soon. There could be a pre-FOMC meeting ramp job but that isn't until the 21st of March so I would think that they would hold off on that. Note that today they injected over 8 billion and yet we still dropped. Sentiment is fading fast. Not a good sign.
Regardless of all the noise, the fact remains we are close enough to my 2000 NDX target now to look for entries. These are short term trades only. The resistance line is dropping fast and so I doubtr now we will get above 2400 assuming a quick bounce comes as planned. If the rally does fail to make a higher high and the things that Don mentioned break down, then the 1800 is the next likely lower low with a risk of 1500 being the all time low. I just don't see too much more downside after that.
Not much else to say tonight. Be careful, this is starting to look ugly. However as I said this weekend, I think the play is to fade it and buy support. Just one thing to make the buying even more scary, if we do hit my target exactly or lower of 1970 NDX, the QQQ will have made the lowest price since it first started trading.
Good Luck,
Lee |
