Stock Attack II - A Complete Analysis Message Board

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

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To: StockOperator who wrote (5340)	4/9/2001 10:19:02 PM
From: StockOperator	Read Replies (1) of 52237

Was today's action a fakeout or prelude to a breakout?? There's a lot of talk going around by some pretty prominent people on WS that the data is pointing to a intermeeting rate cut. Don Hays has been pretty vocal the past couple of weeks that a bottom was close at hand. He is also calling for a early move by the Fed to get things rolling here. Today's action in some stocks was positive overall but prices have much more work to do in the immediate future before I'll grow horns. So how do you play this market. Number one I would say don't let greed be your motivating factor. We all know how difficult it can be to try to trade based off where you believe a top or bottom is being placed in the avgs. Looking at the chart positions I can tell you that we are sitting on a powder keg here that could erupt in either direction. In a post from yesterday I mentioned that many of the DOW stocks are "boxed in" between two opposing trends. Any piece of news such as an early move by the FED or perhaps a bad earnings announcement by a major player (catching the street off guard) could blow prices against you literally overnight. Prices in general are going to attempt to push through resistance in some cases almost a year old. So I think it pays to remember which trend STILL has the wind to its back. Right now that trend is still pointing down. But yet it's smart not to be married to one point of view. I realize like everyone else that a bottom in the avgs is inevitable and is usually only obvious in hindsight. I think most technicians would agree that identifying the trend reversal is the toughest part of TA. My approach here is to simply look at the structure of the charts overall and watch how prices attack the resistance areas. For example on the DOW I am watching to see if 10019 is taken out on a closing bases. If it happens thens 10150 becomes my next area of resistance, mind you some very heavy resistance. That second number is only 300 pts from today's close. The COMPX has even less room to run with only about 100 pts of wiggle room before it runs into heavy winds. Many of those DOW stocks I mentioned have less than a five point window before challenging some key areas. The next couple of days and wks will be crucial. Those downtrends will be beating down on most of these stocks in the very near future. A positive push during this time period would cause me to quickly reassess my position. I will also be looking out on an individual basis to see how stocks trade those areas. As always some stocks will be ahead of the others.

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