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Strategies & Market Trends : News Links and Chart Links

SPXL 204.14

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To: Les H who wrote (533)	8/20/2001 6:13:09 PM
From: Les H	Read Replies (1) of 29597

What to expect now. August 20, 2001. Ord. The Lowrisk.com sentiment readings came in today. They reported 20% bulls, 50% bears and 30% neutral. Last weeks readings where 24% bulls, 59% bears and 17% neutral. Only 20% bulls for last week implies the market is at a bottom. I was told in the last couple days that of the 3500 or so stocks traded on the NYSE, only about ½ are actually operating companies and the rest are preferred stocks, closed funds, derivatives etc. This would affect the readings on the ARMS index, McClellan Oscillator and anything using advance decline issues. We will be checking into this further. The S&P did drawn a bullish "Shake Out" over the last couple of days. A bullish "Shake Out" is when the market breaks below the previous lows and than comes back into the trading range within three trading days. Today the S&P came back into the trading range it broke out of on Friday. Usually there is a re-test of the low of the "Shake Out". The re-test should be on lighter volume that the "Shake Out" itself and have a higher low than the "Shake Out" low. This potential re-test may show up in the next day or two. Today in candlestick charting on the September S&P, a "Bullish Engulfing" pattern formed adding addition confirmation for a bottom forming now. If the current "Shake Out" is successful, than the market should reverse and attempt to take out the previous high of August 2 high near the 1230 area at a minimum. We are long the SPX at 1191.03. We may add an OEX call option on any pull back in the next day or so. The NDX also broke below the previous lows on Friday and has so far not been able to close above the recent lows near 1580 area. Today marks the second day below the breakout point near the 1580 level. For a bullish "Shake Out" to form the NDX needs to close above 1580 tomorrow. We went long the QQQ at 39.20 on Thursday and were stopped out on Friday at 37.80 for a loss. If the NDX rallies back up into the trading range and closes above 1580 by tomorrows close, we may take another long position on the QQQ. We are flat for now. Gold for short term is in a minor downtrend. This down trend may be near an end. It is worth noting that the longer the sideways trend the stronger the rally will be when it begins. This condition is called, building "Cause". The Month chart on Gold remains bullish and we are holding long the XAU. marketweb.com

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