Lee, I'd love to hear your thoughts on this. I find it very interesting:
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The OEX Advantage May 03, 2001
Volume 97, Issue 11
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Support Resistance
DOW 10876.68 - 21.66 10616.10 10936.20
OEX 657.33 + 1.78 628.10 683.90
SPX 1267.43 + 0.99 1217.90 1288.30
OTC 2220.64 + 52.36 2034.60 2250.30
Yesterday was a very volatile session but when you really look at the tape,
it went according to plan. The bulls got off early, sending the DOW and SPX
exactly to overhead resistance at 10,936 and 1,272 respectively. If bulls
could have moved through these levels bears would have had no choice but to
cover short positions and moan about what could have been. Instead, bears
stepped-up and stocks moved decidedly lower. In fact, at one point the DOW
fell to an 80-point deficit as energy and consumer issues swooned. As all
of this was happening technology bulls kept-up the pressure. They never
really got a good shot at NASDAQ 2,250 but the tone was very constructive.
So, where do we go from here? As we begin trade today both the bulls and
bears find themselves in the same predicament. It has not been settled if
the next major move will be higher. There is one thing that has changed,
stocks are now even more extended than they had been previously. If bulls
are going to make their move higher, it is not going to be easy. We think
stocks are likely to head lower and for one very good reason, a lack of
fuel. For weeks traders have talked about enticing the public back into the
stock market.
Stocks have rallied sharply and there is more positive talk
out of Wall Street but the public is not being drawn into the market.
Volume has been very poor on this leg higher and all technical traders know
that is perhaps the most important part of any rally. Sell early strength. |
