Here's a copy of my first e-mail newsletter sent out last Sunday nite...
another one is slated for this Sunday, with many changes on the indexs, stocks, sectors, and where we go from here...
i may be bullish(because the trend is bullish)...but i am no fool..we are due for a major pullback to the middle of the trading bands very soon...we are heavily overbought still..
i will be taking action for the troops as we wait for the reversal up after the pullback...the rollarcoaster is still out there...and we are livin' it & lovin' it...swing trading long is the vogue now...short scalping the fun..
JERRY OLSON'S
"POINT" OF VIEW NEWSLETTER
FIRST EDITION DATED JUNE 3RD 2001
Hello out there my friends and trading buddies...This is the first edition of my weekly newsletter and i'm glad you've decided to give it a try...My goal here is to make us all some money without scalping each day...I am going to provide daytrading triggers on our stocks, as well as swing trades too...but at this very moment in time, at least for this week, i will not ask you to invest as yet...
In fact i want you to take control of all your assets in your IRA's, 401K's and long term portfolios, and let's both look at each stock you own, and the why's and wherefores of either selling those stocks, or hedging them for the near term...What i am saying is this..you need to make some choices with your holdings right here and right now...I am going to try and help you make those tough choices in the next few weeks..privately for subscribers only...
I can give you the Technical Picture of your holdings and suggest what I would do in your case..You need to do all the Fundamental Work, and Due Dilligence yourself..i do not have the time or the inclination for that assignment...My most important goal for us is to read the markets and their movements, read the charts of the stocks and sectors we trade and own, and make solid quality suggestions of what to buy and when to buy...
I am categorically saying right now...i take NO responsibility for anything i suggest..YOU make your own decisions as to what your going to do for yourself...I am here as a sounding board for you, with my best guess as we move forward...
YOU MUST Please learn Point and Figure Charting...This is the single most important suggestion i can make for all of you..It has saved my trading life since 1994...Let's forget those 10 baggers, those 100-200 point moves in those high flying stocks of old..Those dot.coms...forget BIG profits, BIG hits, delusions of grandeur...it does not exist in the real world...We want a solid return year over year for our investment dollars...Homeruns??? yeah sure..go to a baseball game and look for them there..NOT HERE!!!..the site for P&F is..www.dorseywright.com..i have no affiliation with this organization, but i like and know Tom Dorsey personally, buy his book too...
Let's immediately CALM down...forget everything your hear and truly half of what you SEE...I implore you to lower your sights, and be ultra prudent in your THINKING...When you see it in print or on CNBC or in the WSJ or Barrons, "IT'S WAY TOO LATE TO ACT"..
FORGET THE NOISE, FORGET THOSE TIPS FROM FRIENDS, FORGET THE CEO'S PARADING ON TV...FORGET EVERYTHING, EXCEPT WHAT YOU 'SEE" IN FRONT OF YOUR FACE...CHARTS DO NOT LIE, ONLY PEOPLE LIE...
Learn your craft like a professional investor...be the best you can be using Point and Figure Charting...Use it for all it's worth to play the middle of the field, we are not good enough to get out at the top and buy in at the bottoms..but we can and will be able to make nice returns on our investment dollars right in the middle of the playing field(i'll explain later)...DO NOT FIGHT THE TREND FOLKS....if there's ONE lesson i am going to DRILL into your heads, it's this...THE TREND IS YOUR FRIEND..USE IT, FOLLOW IT..BUT DO NOT BUCK IT..DO NOT FIGHT IT..AND THAT GOES FOR DAYTRADING AND LONGER TERM INVESTING...DO NOT TRY TO GUESS WHERE WE ARE GOING...WE DO NOT GUESS, WE DO NOT LEAD.."WE FOLLOW"!!!!!..PLAY CABOOSE....like in choo choo<G>
this one thought will save you from complete disaster...I can tell you this much, while i do NOT know your personal investing problems, i can wager you lost large sums of money trying to buck the trend from March of 2000 as we cascaded lower and lower relentlessly from 5200 NAZ to 1650 NAZ this year...Thats only becuase you did not have ONE CLUE as to what you were doing...NONE--ZERO--NADA...
well folks thats over with...NOW it's repair time for you...I am saying this right here, right now..IF you begin to understand the dynamics of these markets, if you take too heart what i am telling you from deep expeirence's over 25 years of ups and downs, of major wins and major losses...You will come out of this morass on top of the world...But..you have to start somewhere...and that somewhere is right here!!!!!!
OK let's move forward....the markets are in the throws of discounting, or trying to discount stock prices ahead of this quarters eps in July...They are trying to be careful here what with warning season upon us, and major companies in deep trouble getting news orders...Capital spending is not too healthy at this point in time...I am still looking for lower stock prices right thru the fall, Oct/Nov time frame...everything is pushed out for now...the recovery will come late this year, and we'll be in early enough with position and option trades to reap the great benefits when this happens...
The markets as we all know are forward looking...They are always trying to see the bright side of things 6-9 months form now...we are too...only we'll see it in the charts, in the sectors, as they reverse up when the supply and demand begins to change well before the maddening crowd gets wind of it...Remember this, so what if we miss 3-4-5 points in a stock as it moves up and out of a nice base...big deal..we are in this for the long haul, not for instant gratification...the charts have to tell us when we buy and hold on the long side, as well as the short side...we are going to play both sides of this street as best we can...you must learn to short stocks...it's no different than going long..NONE!!!
I firmly believe that the FED will lower interest rates this month and next..at least .25 basis points each time...We do not fight the FED either...at some point there will be a trigger that will ignite this market like you've never seen it before...there is gigantic sums of money pouring into funds accounts right now getting read to buy, in a panic melt up...it's not ready yet..but it will be...and my best guess will be an UPTICK in the Semis Book to Bill numbers...It will not be too late to play that tremendous rally...The semis lead the NAZ by the nose...we are nearing the bottom of the trough right now...and a new improved cycle will emerge taking the stock market to major new highs late next year...And where will we be??? long and lovin' it, thats where...
So if your ready, let's get the show on the road...
I want to talk about the indexs first...The DOW broke heavy resistance right at 11,000 after banging on that number 3-4-5 times...it broke a triple top..." ALL TRIPLE TOPS" correct.."ALL TRIPLE BOTTOMS" correct...thats a fact of life...trust it...so we ran up to 11,350 on the P&F chart...and as i said my downside target without breaking a double bottom, or giving a near term sell signal was 10,800, we are near that now...
Here's my take on the next 2 weeks...First we are very overbought in the longer time frames still..My P&F short term indicators are still to high, and a pullback is eminent and healthy..we can not go up, without coming down first..
So we rallied up to 11,350, became heavily overbought, and i called that top off the called bottom and told everyone to stay out of longs for now...as we sold off last week into my Weds low, i said we were due for a 2 day rally, well we had just that..I think we may see some more up, next week, but it will be slow and more like a grind...The markets took that CSCO news late Friday very very nicely...THINK!!! it's a Friday, CSCO basically says negative things and we held up??? thats good...
We have cycle lows coming in next week around the 7th/8th time frame..I like it there to go long some trades but i want to see and hear who warns this week...if it's small frys then we'll be ok..if it's big boys, we'll play the short side...lots of if's for sure..but thats what is here right now...no true direction just yet...
So on the DOW we look at this week for 2 things...A 3 box reversal up from right here to 11,000, which holds the bottom, and reverses back up...OR, we selloff and break that bottom at 10,650 which takes us to 10,450 right away...too iffy to INVEST just yet..
Let's look at the NAZ....oh btw...please set alerts on any charting service you have real time for any and all numbers i give you on the indexs and stocks...you must be aware of the numbers when they happen, so we do not get caught short/long<G>...
The NAZ has been a serious laggard to the DOW/NYSE...it's that simple...tech has been beaten down for a long time...but it does provide for some interesting trades out there as we move forward...2250 is a 3 box reversal up, 2000 is the double bottom breakdown number...it looks like it to me that what is going on here is a pullback toward the middle of the trading band or playing field...
quick note right here..if you picture a football field with the 50 yard line in the middle representing 50%, to the left is the 30 yard goal line, to the right is the 70 yard goal line..this is the playing field we'll be talking about all the time using P&F lingo...What i saw in the SECTOR BELL CURVE CHARTS was a severly overbought condition above the 70 yard line or 70% area..this means we were skewd to one side of the field..a negative for the longs here...we always pullback to the middle when we get overbought...
if we were skewd to the short side below the 30 yard line or 30% area, we would be looking for bargins right now...i am saying we'll pullback toward the 50%--or 50 yard line shortly, to set us up i think for an upside move...
The SOX index recently has been up and down like a yo-yo...breaking triple tops and triple bottoms, as the pundits of "Fall Street" try to upgrade and downgrade in the same day these volitile semis...it's hallarious...the idiots<G>...at this point in time it hit the BSL this is the "bullish support line" on P&F a solid area of support for all stocks and indexs..the number is 580...it will take a move to 640 to reverse this index up albeit with plenty of resistance over head again at 680 and now 700...a complete breakout would be a print of 720..a serious breach on the downside would be a break down and thru the BSL Line at 540/560 area...the bottom this year was 460..i doubt we get there again...
without the SOX and the semis moving up, we go nowhere fast...
SPX this is the index Chuck Carpino uses along with the S&P futures or the E-mini..the ES01M...his trading bands are explained on his site...first learn P&F then we'll learn the c-bands of the SPX...I have near term heavy R at 1280ish..that is a 3 box reversal up on the charts...1230 is the May 4th lows and a major breakdown there...please set alerts...
The NDX breaks down at 1750, or it reverses up at 1950..sluggish index for months now...the QQQ';s have an identical chart look as the NDX...43 the breakdown, 48 the reversal up from here...
then there's the VIX...well over a month ago i said the VIX would touch 23, and as it did we had this selling preasure right thru last Weds night..a 4 day straight down selloff...well it reversed back up as it touched 26...i will say this categorically..if it reverses back down and breaks 22 we will have a serious correction in the markets, it would be breaking another triple bottom...if that occurrs NO LONGS shorts only...however i was checking the overall put/call ratio and there are many more puts being bought than calls which bodes well for the long side once we get past earnings season...
So right now you have the numbers for the indexs...please set them as alerts and watch the action as it unfolds...
Now lets look at some stocks....for this time frame either long or short side trades we will use the creme dela creme of stocks...forget the little ones...we play the big boys for the safety and the float..when we want to get OUT of a trade, I want a secure feeling i will have no problem...for this first newsletter i am going to give you 10 stocks to trade either long or short as they trigger, and as the markets move one way or the other...
you can day trade them or swing trade them either one..
1...AMAT---THIS STOCK HAS BEEN IN A TIGHT TRADNG RANGE FROM 48ISH TO 59...GOOD ENOUGH FOR ME....AS A DAYTRADE...YOUR BUY TRIGGER IS 52 1/2..THE SHORT SALE TRIGGER IS 50 1/4....IF YOU CHOOSE TO SWING TRADE IT LONG...AND TAKE THAT TRIGGER YOUR STOP WOULD BE 48 A TRIPLE BOTTOM BREAKDOWN...IF YOU TRADE IT OFF THAT SHORT TRIGGER YOUR BUY STOP WOULD BE 53...REMEMBER THIS AS SOON AS YOUR MAKING A PROFIT..PLEASE MOVE UP YOUR STOPS TO AT LEAST BREAKEVEN...WATCH THE SOX TOO...NO OPTIONS HERE AS YET...
2...CHKP---THIS STOCK HAS MADE SERIOUS CONSECUTIVE LOWER TOPS...FROM THE APRIL LOWS IT EXPLODED UP TO 80 FROM 40...THEN IT SOLD OFF AND RALLIED UP AGAIN TO HIT 71 THAT FIRST LOWER TOP, SOLD OFF AND THEN RALLIED UP AGAIN TO 65...ALL THRU THIS TIME FRAME SINCE THE APRIL LOWS THE BRL "THE BEARISH RESISTANCE LINE" HAS HELD THIS STOCK IN CHECK...SO IT BOIUNCES OFF 65 THE BRL LINE AND SELLS OFF AGAIN...ONLY THIS TIME IT BREAKS A DOUBLE BOTTOM AT 54...LAST WEEK IT ACTUALLY REVERSED UP 3 BOXES TO 56....IT HAS EXCELLENT ACTION FOR SURE....YOUR BUY TRIGGER LONG IS 56 1/2..UPSIDE TARGET 59...THE SS(SHORT SALE) IS 53 3/4 WITH A POTENTIAL MOVE TO 50 AND THEN MUCH LOWER IF IT BREAKS THAT NUMBER...IT'S BEEN IN A TIGHT RANGE FOR 3 DAYS NOW...SOMETHING IS GOING TO GIVE...
3...CIEN---THIS CHART LOOKS LIKE CHKP'S CHART SAME TYPE ACTION..RALLIED UP HARD OFF THE APRILS LOWS ETC...DID BASICALLY THE SAME THING...IT TRADES WELL....THE BUY TRIGGER HERE LONG IS 56..UPSIDE TARGET IS 59/60 IF THE MARKET IS MOVING UP...THE SHORT SALE TRIGGER IS 53 1/4 WITH A POTENTIAL TARGET IF IT BREAKS DOWN AT 51---- TO"48"....THIS COULD BE A NICE SWING TRADE..WATCH IT CAREFULLY...IF WE RALLY UP FOR 1-2 DAYS AND THEN SELLOFF..YOU MAY WANT TO HIT IT HIGHER...REMEMBER TRAIL ALL STOPS HERE..
4...PDLI---WHAT CAN I SAY..GOTTA LOVE THE BIO TECHS...CURRENTLY MAKING LOWER TOPS..BUT STILL VERY STRONG...79 3/4 THE BUY TRIGGER WITH 81 A LARGE BREAKOUT OF HEAVY R (RESISTANCE)..A TRIPLE TOP BREAKOUT..A SWING TRADE FOR SURE...76 3/4 THE SS...WITH ANY BREAK OF 74 MORE DOWNSIDE...72 IS EXCELLENT S (SUPPORT)..IN EITHER CASE PLACE YOUR STOPS AT BREAK EVEN AS SOON AS THE STOCK BREAKS ONE WAY OR THE OTHER...
5...HGSI---THIS STOCK IS MAKING LOWER TOPS MORE PRONOUNCED THEN PDLI...YOUR LONG SIDE TRIGGER IS 70 1/2 WITH SOME OVER HEAD R AT 74 IF IT CAN GET MOVING AGAIN...JUST HOLD IT LONG IN A SWING TRADE IF IT PRINTS 71...THE SHORT SALE IS 67 3/4 WITH A POTENTIAL BREAK OF 64 A SERIOUS BREACH OF THE CHART..YOU WOULD HOLD IT SS ALL THE WAY TRIALING DOWN STOPS...MY DOWNSIDE TARGET "IF" THIS HAPPENED WOULD BE 58...WHAT I CALL A SHORT SALE SWING TRADE...
6...QLGC----HAS CREATED A NICE LOOKING POTENTIAL SS HERE..IT HAS GIVEN A SELL SIGNAL, EVEN AS STRONG AS IT LOOKS IT'S NOT...IT'S BOUNCED UP WITH THE RECENT 2 DAY RALLY AND MAY CONTINUE HIGHER IF WE MOVE UP FOR 1-2 DAYS MORE...53 3/4 THE BUY TRIGGER...IT COULD GET TO 57/58..AND THEN BE A SOLID SHORT FROM THERE...IF WE DO NOT RALLY HERE THEN THE SS TRIGGER WOULD BE 51, WITH ANY BREAK OF 47 A BIG POTENTIAL PLUNGE...TO 41...A SOLID SS SWING TRADE...
7...FCEL---THEY ARE BURNING FOR SURE...NICE VOLITILE STOCK IN A HOT SECTOR..WE CAN AND SHOULD TRADE IT BOTH WAYS...79 1/4 THE BUY TRIGGER TIGHT STOP HERE...COULD RUN TO 85ISH...76 1/4 THE SS..WITH A MOVE TOWARD 72 A REAL SHOT...EITHER WAY, WE SHOULD PLAY IT BOTH WAYS MARKET WILLING..SWING TRADES WORK WELL WHEN THE MARKETS MOVE 2-3 DAYS IN ONE DIRECTION...
8...EBAY...OOH I MADE TONS ON THIS SWEET HEART STOCK...JUST BROKE A DOUBLE BOTTOM LAST WEEK AS IT PRINTED 59 AFTER A SENSATIONAL RUN UP OFF THAT TRIPLE TOP BUY SIGNAL I TOOK AT 56....62 IS THE BUY TRIGGER LONG...WITH A RUN TO 65ISH A TARGET...ANY BREAK OF 67 IS WOW!!! DOUBT IT WILL HAPPEN WHAT WITH CYCLE LOWS COMING LATER THIS WEEK...ON THE SHORT SIDE...59 3/4 IS YOUR TRIGGER AND IF IT TAKES OUT 58 THEN YOU'VE GOT A SOLID SWING SIDE SHORT...
9...QCOM---THIS STOCK BROKE THE BSL LINE AS IT PRINTED 60..ANY RALLY UP HERE IN THE NEXT FEW DAYS IS A SHORTER'S DREAM SET UP...63 THE BUY TRIGGER WITH 66ISH POSSIBLE...THEN??? I WOULD SHORT THIS STOCK IF WE ROLL OVER AS EXPECTED...IF WE TANK RIGHT AWAY EARLY NEXT WEEK..THEN THE SHORT SALE TRIGGER IS 59 3/4 WITH THE DOWNSIDE AT 56 A SURE BET...AND ANY BREAK OF THAT NUMBER WOULD BE A DOWNSIDE DISASTER..."UNLESSS YOUR SHORT"<VBG>
10...BRCD---THERE IS NOTHING PRETTY ABOUT THIS CHART..AFTER MAKING A NICE MOVE OFF THE RECENT APRIL LOWS...IT HAS GIVEN TWO CONSECUTIVE SELL SIGNALS AND HAS NOW MADE A DCB(DEAD CAT BOUNCE)..THE LONG SIDE TRIGGER IS 40 1/4 WITH LIMITED UPSIDE TO 44 OR SO... A PERFECT SS CANDIDATE RIGHT THERE "IF" IT EVEN GETS THERE???...IF WE SELLOFF EARLY NEXT WEEK..THEN 37 3/4 THE SHORT TRIGGER..WITH A BREAK OF 35 TAKING IT RIGHT TO 32...
SOME QUICK TAKES HERE OF OTHER STOCKS DEPENDING ON THE MARKETS DIRECTION AND STRENGTH..
MSFT---73 HUGH BREAKOUT...66 BIG BREAKDOWN
NVDA---93 A NICE BREAKOUT NUMBER TO WATCH..
SEBL---48 NICE BREAKOUT...43 THE BREAKDOWN
ONIS..30 IS A MAJOR BREAKDOWN NUMBER...34 REVERSES IT UP...
BRL---LOOKS NICE A SERIOUS SS SOON..ON A HIGH POLE...
HEADSUP....THE FUEL CELL CHARTS LOOK LIKE SHORTS TO ME ON ANY RALLIES...WATCH THEM FOR WEAKNESS...
I WANT TO BEGIN TO TALK ABOUT USING COVERED CALL WRITTING FOR THOSE OF YOU IN NEED OF SOME INCOME TO BOLSTER YOUR ACCOUNTS...WE WILL DISCUSS THIS AT LENGTH OVER TIME..IT'S A CONSERVATIVE WAY TO REAP PROFITS ON LONG POSITIONS THAT YOUR STUCK IN..OR, IF YOU WISH TO BUY A STOCK AND MAKE REPEATED INCOME OFF THAT INVESTMENT I'LL SHOW YOU HOW TO DO THIS...
YOU NEED TO TAKE IN MONEY ALL THRU THE YEAR...YOU'LL LOVE THIS NICE CALM STRATEGY ONCE I KNOW WHAT YOUR STUCK IN...LET ME KNOW OK???
Well thats it for now my friends...please set alerts..be careful this week..as always..
i am going to e-mail the whole group without suppressing the list...for some reason i am getting e-mails back that do not read the BCC undisclosed list header right???
no biggie..everyone should get to know one another anyway<G>..
i would appreciate that you do not distribute this newsletter to anyone untill one week later...your paying for this service...if they want to join us have them e-mail me...also please don't hesitate recomending this service to others...we can and will help everyone we can to a better understanding of how to trade and what to trade too...for the respectable fee of $40.00 per month, i feel this service will grow both in stature and in clients...
thanks so much for your joining this little group..i hope we can be successful in our quest to make a substantial amount of money in the markets going forward..
best of luck to you all...
my warmest regards
jerry...
Jerry Olson
Master Class Trader...
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