HERE'S MY NEWSLETTER FROM THE 15TH OF SEPT...HOPE YOU'RE ALL DOING WELL..WE ARE<G>
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JERRY OLSON'S
"POINT" OF VIEW NEWSLETTER
DATED SEPT 22ND 2002
"ARMAGEDDON AWAITS US"
Hello everyone I hope all is well with you and yours this fine autumn Sunday afternoon...Eagles play Dallas at HOME cannot wait...Weather has been summer like, just hot and gorgeous. One of our subscribers mentioned in an e-mail to me about using black type for the newsletter so people can print it out without burning up all their color ink. I think that makes sense..So from now on each and every newsletter will be in back type...And printing it out makes a world of sense if your trying to follow all the info in there...It will be right at your fingertips...
Well let's discuss what's going on here at length..First of all we have a serious ALERT!!!!!!...THE NYSE BULLISH PERCENT HAS TURNED DOWN AND IS NOW IN A COLUME OF O'S..THE OTC WILL FOLLOW FOR SURE..What does this mean to us Piffers?..Man the lifeboats. This is NOT good folks..What with all the indexes breaking down last week, and I mean ALL indexes, we are in deep trouble going forward here for the next 1-2 months...Will we rally? of course we will, is it sustainable? NOT on your life..
Currently we are deeply oversold, Put Call ratios very high here all thru last week, I am expecting a bounce now up and into OVERHEAD resistance as a BACKSIDE BOUNCE into the 20/40 ema's on all daily charts of all indexes..."IF" WE EVEN GET THERE...We will short all rallies there everyone, till it's wrong. If we even touch the 20 ema? I'll begin to set up short positions there...Start by using the OEX puts for Oct/Nov time frame..Don't go nuts either..While options are a great use of leverage, if you over step your boundaries you'll get murdered...Here's a simple rule of thumb..If you trade 500 shares of stock then buy 5 contracts..not 15 or 20...if you trade 300 shares of stock usually buy 3 contracts, that's enough...Buy AT THE MONEY STRIKES...
I think it's very important that we ponder the potential here. What I mean is this. If we do in fact rally here for a week or so, then begin the final rollover crash mode, you'll need to be in position shorts as I think they'll be some panic days of big proportions, and then once this major down move is over, we should get ready for a much bigger bounce later this fall...SO UP---DOWN---UP is my thinking here...and this up will be feeble at best what with the NYSE BP rolling over last week, it's funny and I mentioned this before in other newsletters..When the NYSEBP reverses down, we rally? it's very odd, then? uh oh!!..The OPTI was close to reversing down and as I said last week it's a precursor for the big boys to reverse, well it did reverse and hard.. then the NYSE did too & well here we are!. Btw..it would not surprise me to see us actually take out the July 24th lows with abandon..Not kidding either..Bearish sure I am, but I'm still a trader..My indicators are very negative. Can they stay that way?, of course..Can they reverse back up you betcha..We just have to take one day, one week at a time..No rush, no urgency, this will unfold the way the street is going to take it..and we'll follow merrily along<g>...Playing caboose is fun folks...I hate to speculate, guess or gamble..but we all do it..
I have rarely seen so many chart break downs at very strong support areas on all the indexes and all the stocks we follow. This means the buyers are running for the hills and the short sellers are pushing this market lower and lower..In the inverse though, they are setting up a HUGH short interest that will catapult this market up like a rocketship at some point on down the road..When? I have no clue, but usually after we test these July lows..I think the fund managers are so scared right now they are actually afraid to BUY at these levels for fear of being trounced at lower levels as we cascade lower and lower..At some point they will come in to the markets again..But remember this, when you break 52 week lows on stocks & indexes etc, that still leaves the door open for lower lows...Weak is weak folks...
OK LET'S CHECK THE INDEXES, BP'S AND ALL THE P&F INDICATORS.
DJIA---THIS INDEX HAS FALLEN 15 STRAIGHT DOWN BOXES WITHOUT ONE 3 BOX REVERSAL BACK UP? NOW THAT'S WEAK..IF WE BOUNCE HERE THE MIDDLE OF THE 10 WEEK TRADING BAND IS AT 8550, THE 20 EMA DAILY CANDLE CHART(DCC) IS AT 8400 AND A FIBO RETRACE TOO. NOW IF WE CANNOT GET TO THE 20 EMA, AND BEGIN TO FALL? THAT WOULD SIGNAL THE RALLY IS WEAKER THAN THOUGHT AND WILL FALL FASTER ON THE ROLLOVER DOWN..KEEP FOCUSED HERE. SINCE THE AUGUST 22ND TOP THIS INDEX HAS HAD 4 CONSECUTIVE SELL SIGNALS. THE BULLISH PERCENT OF THE DOW..BPDJIA IS AT 34% DOWN FROM 48% JUST 1 WEEK AGO? WOW! THE SEPT 2001 LOWS WERE 18% AND THE JULY 24TH LOWS WERE AT 4%...HELLO? KNOCK KNOCK ANYONE HOME??????????????
BTW JUST A FOOT NOTE...LOOKING AT THE CANDLESTICK CHARTS AND P&F THEY HAVE THIS SYMMETRICAL PATTERN THAT SUGGEST WITHOUT A DOUBT WE DO IN FACT TEST JULY 24 THE LOWS...
NAZ/COMPX---THIS INDEX ON THE CURRENT DEFAULT CHART REVERSED DOWN 3 BOXS AT 1250, AND IT'S VERY VERY WEAK..1200 IS THE DOUBLE BOTTOM(DB) 1150 IS A BIG BREAK...ON THE SHORTER 10 POINT CHART 1190 IS THE BREAKDOWN...I CAN SEE A POTENTIAL RALLY HERE UP INTO OVERHEAD(O/H) R(RESISTANCE) AT 1300/1310 BUT ANY BREAK OF 1190 COULD TAKE US TO 1050..YEAH YOU READ THAT RIGHT 1050. OH ME O MY...1250 IS A NORMAL 3BXRVUP.
NDX---RIGHT AT ANOTHER CROSSROAD, IT SHOULD BOUNCE HERE TECHNICALLY ALONG WITH EVERYTHING ELSE..BUT THIS CHART IS TERRIBLE...940/60 AREA IS THE 20 & 40 EMA'S DCC. IT WOULD BE A GOOD PLACE TO SHORT THE QQQ'S. NOW IF AND WHEN THIS INDEX BREAKS 850 WE GO INTO UNCHARTED WATERS..THE BP ON THIS INDEX IS AT 28% A BREAK OF 24% TAKES IT 8% THE JULY LOWS..MAYBE THIS ONE GOES TO "O"%<VBG>..
SOX---WEAK SISTER HERE FOLKS..AND LOOKING GRIM. WE ARE BELOW BOTH THE SEPT 2001 & JULY 2002 LOWS, WILL SHE BOUNCE YEAH I GUESS ALONG WITH EVERYTHING ELSE. MY DOWNSIDE TARGET FOR NOW IS 220. 320 IS THE 3 BOX REVERSAL BACK UP..360 IS THE DOUBLE TOP(DT). THE BP SEMI IS AT OR NEAR GOOD SUPPORT OR A BOTTOM AREA AT 10%, WATCH FOR 18% REVERSAL BACK UP...MAYBE WE GET THAT REVERSAL UP AND THEN ROLLOVER AGAIN...
BTK---WELL IF FINALLY SUCCUMBED TO THE PRESSURE. BROKE THE 320 AREA AND THE BSL LINE TOO THAT'S THE BULLISH SUPPORT LINE(BSL) THE ULTIMATE DOWNSIDE TARGET HERE IS 240..NOT VERY NICE. 350 IS THE 3 BOX REVERSAL BACK UP. THERE'S SOME MINOR SUPPORT AT 280 IF WE ROLLOVER AS THE 1ST TARGET AREA. BP BIOM IS AT 21%, HISTORICAL BOTTOMS ARE AT 8% SO STILL PLENTY OF DOWNSIDE STILL IN THIS INDEX.
S&P DEC FUTURES/ES02Z---ACTUALLY HIT MY INTRAWEEK TARGET AT 840, THERE'S PRETTY GOOD SUPPORT THERE. THIS INDEX FELL 16 BOXES STRAIGHT DOWN WITHOUT A REVERSAL UP OF 3 BOXES..AMAZING...WATCH FOR A BOUNCE TO MAYBE 890/900 THE 20 & 40 EMA'S AND THE MIDDLE OF THE 10 WEEK TRADING BAND. I'D SHORT IT THERE..THIS INDEX CONTINUES TO MAKE LOWER HIGHS AND LOWER LOWS. ULTIMATE TARGET IS 776 THE JULY BOTTOM..
OEX---WELL? WE HAD A PERFECT TRADE FOLKS, IT BROKE 435 AS ADVERTISED AND PROMPTLY FELL RIGHT DOWN TO 420, THAT'S 15 SOLID POINTS EVERYONE...I SAID BUY THE 440 PUTS ANYONE DO IT??? ON A RALLY UP WE COULD SEE 450 AREA. SO IF WE ROLL OVER FROM THERE BY THE 450 PUTS. EITHER OCT OR NOV. 460 IS A DOUBLE TOP..WATCH THIS INDEX IT TRADES OPTIONS NICELY AND IS VERY LIQUID..YOU'LL GET FILLED ALMOST IMMEDIATELY..I HAVE A DOWNSIDE TARGET OF 385 NICE HUH<G>?...THE BP ON THIS INDEX IS AT 32% THE JULY LOWS ARE AT 8%..PLENTY OF ROOM FOR THAT SHORT.
SPX---BROKE DOWN AS EXPECTED AT 870 IN LAST WEEKS NEWSLETTER. HIT SOME MINOR S(SUPPORT) AT 840...870 THE 3 BOX REVERSAL BACK UP 900/910 A POSSIBILITY..YOU COULD USE SPX PUTS, OR THE SPY TO SHORT..THE SPX BP IS AT 34% IT COULD PLUNGE DOWN TO 12-14% IF/WHEN WE TOUCH THE JULY LOWS..
BTW...IS EVERYONE GETTING THIS PICTURE??? WHEW!!!!!
VIX---UH! OH! THIS BABY BROKE "OUT" NEGATIVE FOR THE MARKETS..THIS INDEX WHICH TRADES INVERSE TO THE MARKETS JUST BROKE A SPREAD QUADRUPLE TOP AT 45. MY ULTIMATE P/O PRICE OBJECTIVE IS AT 56/57 A DOUBLE TOP AREA. WATCH FOR A 3BXRVDN AT 43 FIRST. IF THIS WERE A STOCK WE WOULD BE BUYING IT<G>..
VXN---BROKE A DT AT 62 MADE A HIGHER LOW TOO AT 53...JUST REVERSED DOWN ON FRIDAY AT 59 IT SHOULD MAKE ANOTHER HIGHER LOW, AND SET UP FOR THE NEXT POWERFUL BREAKOUT. 71 IS THE FIRST TARGET, 94 THE NEXT? HOLY COWSKI...THERE'S SOME HEAVY R AT THE BRL LINE AT 65..IT WILL PROBABLY BLOW RIGHT THRU THAT ON THE NEXT MOVE UP. 72 WOULD SIGNAL THAT MAJOR BREAKOUT AREA...
OK HERE'S OUR WATCH LIST FOR THE COMING WEEK..POST OPEX..
IBM---BROKE DYNAMIC S AT 66, A BIG AREA OF S...I AM SS AT 64.25 FOR A TRADE...WHEN IT BROKE 64 THAT BROKE IT ON A 2 POINT CHART TOO..VERY NEGATIVE FOR THIS STOCK EVERYONE..YOU CAN SHORT THIS AT WILL NOW ON ANY RALLY UP...65.10 THE BTL(BUY TRIGGER LONG)...62.85 THE SST(SHORT SALE TRIGGER)...
BBH---I AM SHORT THIS INDEX AT 76.71...IT BROKE A SPREAD QUADRUPLE BOTTOM AT 77 ALONG WITH THE BTK BREAK OF 320..MINOR S AT 75 THEN? 66 THE ULTIMATE TARGET..I'LL JUST TRADE THIS FOR NOW ...79 IS THE 3 BOX RV UP...78 BTL...75.90 THE SST...
MSFT---THIS STOCK WILL BE LAST ONE STANDING<g>...IT'S IN A TRIANGLE ON P&F AND THE DCC..IT'S GOING TO BREAK ONE WAY OR THE OTHER SOON...48.30 THE NICE BTL...50 THE TARGET IF WE RALLY...46.40 THE SST.,..
AMGN---BREAKS A SPREAD QUAD BOTTOM BUT RUNS RIGHT DOWN TO THE BSL LINE AT 41..GOOD SUPPORT THERE..IT'S ALSO AT UPPER GAP SUPPORT TOO ON THE DCC...THIS STOCK IS FORMING A ROUNDED TOP ON THE CANDLE CHART..NEGATIVE...42.75 THE BTL...40.40 THE SST..I'D WAIT FOR THIS...
CCMP---THIS CHART IS SAYING IT'S GETTING WEAKER AND WEAKER...EVENTUALLY IT WILL BREAKDOWN AND BE A SOLID SHORT..40.90 THE BTL...38.90 A VERY SOLID SST THERE...
CHIR---IN A REVERSE PENNANT FORMATION HERE ON THE DAILY SO THAT'S A NEGATIVE...37.55 THE BTL...35 THE SST AND THE DOUBLE BOTTOM BREAK ON P&F TOO..SOLID SHORT THERE...
EBAY--GIANT TRIANGLE ON ALL CHARTS...MOVING SIDEWAYS, BUT FOR HOW LONG? SOMETHING'S GOING TO HAVE TO HAPPEN HERE...57.75 THE BTL...55.90 A SOLID SST THERE...
QCOM---GAPPED UP ON HEAVY VOLUME FRIDAY ON GOOD NEWS...29.10 THE BTL AND THE 3BXRVUP..31 THE TRIPLE TOP 32 THE BREAKOUT...27.05 THE SST...
QLGC---BROKE A REVERSE PENNANT FORMATION LAST WEEK..AND A SPREAD TRIPLE BOTTOM TOO..VERY NEGATIVE CHART..THIS STOCK IS A SHORT ALL RALLY STOCK...29.60 THE BTL...31 THE 3BXRVUP...32/33 O/H HEAVY R...SHORT IT THERE IF IT CAN GET THERE...27 THE SST...
KLAC---THEY WERE TALKING ABOUT THIS STOCK RALLYING UP TO 40 FOR "MAX PAIN"? ARE THEY NUTS? THIS CHART LOOKS AS BAD AS QLGC'S...AND ALL THE OTHER SEMIS..40?...THE 20 EMA DAILY IS AT 32!!!!!...29.05 THE BTL THE 3 BXRVUP IS AT 31 LET'S SEE IF IT CAN GET THERE FIRST<VBG>...YEAH IT'S OVERSOLD...SO IS EVERYTHING...27 THE SST...25 THE TARGET...
CEPH---THIS CHART LOOKS A LOT LIKE AMGN'S..ROUNDED TOP AND ROLLING LOWER AND LOWER. GAVE IT;S SECOND SELL SIGNAL ON P&F....41.40 THE BTL...39.25 THE SST..
IDPH---BROKE OUT OF A RISING WEDGE AND JUST GAVE IT';SO SECOND SELL SIGNAL TOO..THE BIO'S ARE IN TROUBLE HERE EVERYONE..41.05 THE BTL...39 THE GOOD SST..
INTU---LOOKS LIKE IT TOPPED OUT ON THE DCC...READY TO BREAK HERE...45.25 THE BTL...43.25 THE GOOD SST...
EXPE---VERY VERY TIGHT TRIANGLE ON THE DCC HERE...SQUEEZING TO THE UPSIDE I THINK...HERE'S THE STORY...55 IS A TRIPLE TOP AND A 3BXRVUP 56 IS THE BREAKOUT..IT COULD SEE 50 IF WE MOVE LOWER MON/TUES...53.75 THE BTL---51.80 THE SST...
AMZN---VERY NICE HIGH POLE SHORT LAST WEEK...WE TALKED ABOUT IT IN THE ROOM...THE STOCK IS IN A RISING CHANNEL HERE..AND HAS OK S AT THE 200 EMA DCC...16.35 THE BTL...OH THIS STOCK ALREADY REVERSED DOWN NICELY...15.25 THE SST...
TEVA--I THINK THEY'LL BUY THE DRUGS ON THE COMING RALLY..GOOD BP HERE AT 42% BULL ALERT..ALSO THIS STOCK IS SQUEEZING UP TOO...IT PULLED BACK TO THE 20 EMA ON THE DCC..AFTER A TOPPED OUT DOJI A FEW DAYS AGO...68.60 THE BTL...70 A HUGH BREAKOUT THERE..I MEAN BIG...66.45 THE SST...65 IS S THERE..64 THE BREAK..
MERQ---IT BROKE A SPREAD QUINTUPLE BOTTOM LAST WEEK AT 20..NOT VERY NICE<VBG>...21.30 THE BTL..19.80 THE SST...23 THE 3 BXRVUP..MIGHT SS IT THERE...
NVLS---A SAD AND SORRY CHART...AT 52 WEEK LOWS...ANY BREAK OF 22 IT CONTINUES LOWER...23 THE BTL...26 IS A 3BXRVUP...21.50 THE SST...
DELL---BROKE A TRIPLE TOP AT 27 THEN GOT HIT IN THE HEAD AT HEAVY O/H R AT 28, REVERSED DOWN 3 BOXES HERE...25.75 THE BTL...28 3BXRVUP TOUGH R THERE..29 BIG TIME BULLISH BREAKOUT... 24 THE SST..ANY BREAK OF 21 THIS STOCK WILL PLUNGE...
BZH---RIGHT AT THE BSL LINE HERE..I WOULD EXPECT A SMALL BOUNCE..64.70 THE BTL..66 3BXRVUP..62.50 THE SST...
OK THAT'S IT FOR THIS WEEK...WE HAVE THE INFAMOUS FOMC ON TUES..THEY STAND PAT FOR SURE..JUST A HEADSUP IF THEY CUT? WE MAY RALLY FOR 1-2 DAYS..BUT TO ME THAT WOULD BE THE WORST THING THAT COULD HAPPEN TO THIS MARKET AND I'LL DOUBLE EVERY SHORT I BUY..IT WILL SIGNAL TO THE STREET THE ECONOMY IS WEAK AND GETTING WEAKER..MEANING NO PROFITS, NO REVENUES, NO INVESTMENTS..NEGATIVE..BIG TIME..
KEEP YOUR EYE ON THE BALL...FOCUS FOCUS FOCUS...STAY ALERT HERE..THERE'S A LOT OF EXTRACURRICULAR EVENTS OUT THERE TOO LURKING AROUND..STAY ALIVE USING YOUR REAL TIME NEWS ALERTS...ANYTHING CAN AND USUALLY DOES HAPPEN DURING THIS LAST PHASE OF THIS SEASONAL CYCLE...
ANYWAY BE COOL
BEST REGARDS
JERRY
Jerry Olson
MasterClassTraders.com
jerry@masterclasstraders.com
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