AND HERE'S LAST WEEKS LETTER TOO...
JERRY OLSON'S
"POINT" OF VIEW NEWSLETTER
DATED OCT 13TH 2002
"I'M FROM MISSOURI--LETS SEE THE NUMBERS"
Hi everyone I hope you and yours are doing fine these wild and wholly trading days...If we get any more volatility the roller costar would fly off the tracks<g>...Gee Whiz...Well we sure can't say it isn't interesting huh<g>?
Ok so what's my take on all this jazz?...Well I'm from Missouri and you need to SHOW ME THE MONEY before I invest one red cent...I am totally NOT convinced we bottomed...Let's NOT get EUPHORIC just yet ok?..You want to dive into this abyss be my guest..but I'm not going anywhere just yet...Hey we can chase with the best of them IF this is REAL!..Maybe it is maybe it's not...So what?, you gonna gamble? No your not!!!....Why? because I don't like what I see yet..
There has not been ONE Bullish Percent reversAL up yet..NOT ONE!...I'll wait folks..so we miss a trade big deal..better than lost money...And who says we don't come down for one last FAST and furious retest of the Weds lows?? huh? the Wizards of Fall Street? hey what the hell do they know??? They puke it up at the bottom and buy and hold all the way down, and then buy it at the top..These guys have never had a clue...Look I have not taken one dime of my expendable cash to invest in this market for a long long time..I am not convinced this is it yet...and when I do invest and when you invest bet your bottom dollar we'll have HARD STOPS under all our longs..ALL OF THE TIME...without question..we will not lose money...
Right now all I've seen is a BIG TIME DEAD CAT BOUNCE from deeply oversold conditions...In fact every index and stock that hit their respective Bottom of the 10 week trading band and below, bounced up hard...The 10 week trading band is used for oversold and overbought scenarios...What this means is simply this...If a stock or an index is below the brl and bsl lines at the lows of the chart, these bounce usually only move up toward the middle of the trading band from below toward the middle to take off the excesses of that oversold area...Meaning DCB...the real question is this, can these indexs and stocks give BUY SIGNALS... that means breaking the Overhead Resistance and actually changing the trend of supply to demand..Do you get this???
So if you picture a chart and your looking at it on P&F, and you see this stock or index at very low levels and it bounces back up, it only relieves this excessive oversold area..period...and the bounce usually takes it into R areas on the Daily Candle Charts(DCC) and the R areas on P&F..and right now everyone,
THAT'S EXACTLY WHAT HAPPENED LAST WEEK..NOTHING MORE NOTHING LESS.....SO FAR...
Now if we begin to break Double tops and the bullish percents(BP) begin to reverse up, and the 2 -3 short term P&F indicators start to reverse back up then we can become much more aggressive...I'll wait for that..I am not rushing in where fools reside...we must have patience and resolve...Think about all those Mutual Fund statements mailed out last week just coming into the hands of all the investors??? That should help us right? yeah right? the consumer is already pulling back...Remember the Chicago PMI under 50?, how about the Michigan Sentiment number the street ignored it fell nearly 6 points folks? Retail sales fell too, and fell hard...
Right now based on my sources in la la semis land there are NO orders..NONE, I think each company will warn about the 4th quarter which I think will be even worse than the 3rd...Hey everyone can paint a rosy picture without hard numbers? the streets been doing that for ever...If the consumer pulls in their horns for the holidays lookout below...Sure we have excellent seasonality with us from Nov thru April..And of course we'll take advantage of that..Sometimes the street just decides to BUY..if they do, we do...I love playing caboose...the markets go up then we play the long side, the markets go down then we play the short side..simple...we do not have to be GURU's of Fall Street everyone...let the market influences take us for the ride..we just buy a ticket on the train...
Anyway...I am not convinced yet..so I'll stay cautious through the end of the month and the first week in NOV...then we'll see, unless we begin to breakout...stay calm cool and collected..be alert, be focused...
OK HERE'S THE CHARTS OF THE INDEXES AND THE P&F INDICATORS...
DJIA---CAN WE SAY A WILD POP LAST WEEK? WE TOUCHED 7200 AND RALLIED UP TO 7900..THERE IS SOLID OVERHEAD(O/H) RESISTANCE(R) RIGHT HERE..WATCH FOR 7750 THE 3BXRVDN(3 BOX REVERSAL DOWN)..OR A BREAKOUT AT 8100...THE DOW DIAMONDS..THE DIA'S..HAVE HEAVY O/H R AT 80, 81 THE TRIPLE TOP B/O OR SHORT IT HERE AND LOOK FOR THE 3BXRVDN AT 76...
NAZ/COMPX---THIS INDEX ON THE DEFAULT CHART IS STILL 100 POINTS AWAY FROM A REVERSAL UP AT 1300..I WENT TO THE 10 POINT CHART TO CHECK IT OUT...IT RALLIED UP NICELY ALONG WITH EVERY OTHER INDEX...1190 THE 3BXRVDN--1240 THE DOUBLE TOP(DT) BUY AREA...THIS INDEX HAS NOT BROKEN THE 8/22 TOP AND THE 9/11 TOP VIA THE DCC...1250 WOULD DO THAT...
SOX---THE SEMIS ARE DEEPLY OVERSOLD AND BROKE MY DOWNSIDE TARGET OF 220 WELL BELOW THE 10 WEEK TOO, AND STOPPED AT BELOW 210...THEN RALLIED UP HARD TO 250..HOWEVER..IT NEEDS 265 TO GIVE A BUY SIGNAL...235 REVERSES IT DOWN AND WE COULD TEST THE "NEW" BOTTOM OF THE 10 WEEK AT 195..IT IS POSSIBLE...BULLISH PERCENT OF THE SEMIS IS AT 9.60% IT NEEDS 14% TO REVERSE BACK UP...REMEMBER I WROTE IT WAS AT 8% LAST WEEK?..SO WHAT WITH ALL THAT RALLY IT MOVED 1.60%?...
BTK---INTERESTING CHART HERE FOLKS..I LIKE THE BIO'S AS STATED HERE BEFORE...BUT..THERE'S ALWAYS A BUT RIGHT?<VBG>...WHEN WE BROKE 320 AND TOUCHED 305 THAT SET A BOTTOM..THEN WE RALLIED UP TO 335 WHICH IS O/H R...WE RETESTED 305 AND HELD AND NOW RALLIED BACK UP HERE..SO THIS IS THE DEAL...340 IS A BREAK OUT..BUT 300 IS A SERIOUS BREAKDOWN..AND I DID NOT LIKE THE ACTION ON FRIDAY OF THIS SECTOR IT LAGGED SERIOULY...THE BP OF THE BIO'S IS AT 22% AND NEEDS 26% TO REV UP..18% IS VERY BAD...
NDX---LOOKS OK FOR THAT DCB..BUT JUST A RALLY UP OFF O/S LEVELS SO FAR...TOUCIUNG THE 40 EMA DCC..WATCH 860 FOR THE REV DOWN AND 900/920 AS THE TOP..
SPX---THIS INDEX BROKE BELOW THE JULY LOWS TO 767 ON WEDS AM, THEN SPIKED UP FOR 2 DAYS 77 POINTS TO 843...THATSA NICE MOVE FOLKS.. A LITTLE TOO EUPHORIC FOR ME...AT 840 IT 'S JUST "ANOTHER" LOWER TOP SO FAR..WE CAN BREAKOUT AT 860...A SPREAD TRIPLE TOP..825 THE 3BXRVDN....RETEST??? COMING???
OEX---I PLAYED THIS ONE LIKE A BROKEN VIOLIN...OH WOW..AMAZINGLY BAD TRADES...RALLIED UP NICELY TO THE DT AT 425...435 IS THE P&F BUY SIGNAL...410 THE 3BXRVDN..THIS INDEX IS RIGHT AT THE DOWNTRENDLINE..370 COULD BE IN THE CARDS...I MAY BUY SOME PUTS AGAIN MON/TUES..BOTH FOR OCT AND NOV...IF WE BEGIN TO ROLL OVER AGAIN...
VIX---4 CONSECUTIVE BUY SIGNALS OVER THE LAST 7 WEEKS..WE CERTAINLY WERE DUE FOR THIS RELIEF RALLY HUH??? SO WHAT HAPPENS...THERE IS HEAVY SUPPORT RIGHT AT THE BULLISH SUPPORT LINE(BSL) AT 43...AND THIS INDEX PULLED BACK TO THE MIDDLE OF THE 10 WEEK TRADING BAND FROM ABOVE..GOT THAT PICTURE THE EXACT OPPOSITE OF FROM BELOW...46 THE 3BXRVUP...42 BREAKS THE BSL LINE AND WOULD BE POSITIVE FOR THE MARKETS...
VXN---THIS INDEX LIKE THE VIX WAS ABOVE THE BSL AND BRL LINES TOO...IT HAD DYNAMIC O/H R AT 62 THE QUADRUPLE TOP AREA..BUT IT BROKE IT AND WENT TO 64 TWICE...THEN REVERSED BACK DOWN LAST WEEK TO 59..THERE IS POWERFUL SUPPORT AT 57 IT'S A TRIPLE BOTTOM AREA AND THE BSL LINE TOO BOOT...OBVIOUSLY IF WE BREAK THE S THEN THE MARKETS WOULD EXPLODE UP...I DOUBT THAT HAPPENS RIGHT HERE...62 IS THE 3BXRVUP...
SPZ2--ES02Z--SPOOOS---WELL THIS INDEX/FUTURES RALLIED UP LIKE A SCARED RABBIT FROM BELOW THE JULY LOWS AT 776 IT TOUCHED 768...WE CAME DOWN 21 BOXES AND THEN IN 2 DAYS RALLIED UP 19 BOXES TO FORM ANOTHER LOWER TOP SO FAR...860 WOULD BREAK THIS INDEX OUT...832 WOULD REV IT DOWN..
OK I THINK YOU GET THIS PICTURE...NOW ON TO OUR WATCH LIST OF STOCKS..
MCHP---WONDERFUL STOCK STRONG AS HELL...THIS STOCK HAS FORMED A BULLISH CATAPULT AND IN THIS ENVIRONMENT..TERRIFIC LONG TERM BUY AND HOLD TYPE STOCK IF WE PULLBACK THIS WEEK...24.20 THE BTL(BUY TRIGGER LONG)---22.20 THE SST...THERE'S AN INVERTED HEAD AND SHOULDERS ON THE DAILY CHART..VERY BULLISH... WE MAY BUY THE JAN 25'S OR 20 ON ANY PULLBACK..CALLS THAT IS...
MSFT---THIS STOCK BROKE THE BSL LINE RECENTLY ON TRIP DOWN TO 44..IT'S REV UP HERE TO 48, 49 IS O/H R AND THE BRL LINE TOO..NEGATIVE...BUT, THIS STOCK IS A BUY ON PULLBACK TYPE STOCK...WE'LL WAIT AND NOT CHASE..49.75 THE BTL---47.90 THE SST...THERE IS GAP S AT 47.50ISH...EPS ON THURS..
AMGN---POWERFUL STOCK AND CHART...BROKE A SPREAD TRIPLE TOP AT 49 LAST FRIDAY..VERY POSITIVE..BUT IT'S TOUCHING THE 200 EMA ON THE DAILY...WATCH FOR SELLERS THERE FIRST...49.30 THE BTL...WAIT FOR IT...47.00 THE SST...
IDPH---I AM SS THIS STOCK AT 38.57 AND HELD IT OVER THE WEEKEND...RAN UP AND INTO O/H R AT THE 20 EMA DCC...IT COMPLETED A 3BXRVUP...39.60 THE BTL---37. 60 THE SST..THAT WOULD BE SWEET<G>..JUST SCALPING IT HERE..EPS THIS WEEK AND THEY ALREADY GUIDED HIGHER...
CHIR--TRYING TO MAKE A NICE ROUNDED BOTTOM UP FORMATION ON BOTH CHARTS...BROKE A DT LAST WEEK AT 38...HITTING THE 20 EMA O/H RIGHT HERE...39.50 THE BTL---37.50 THE SST..
CEPH---VERY TIGHT CHART PATTERN ON P&F...SITTING RIGHT AT HEAVY O/H R AT 43..44 IS A VERY BIG BREAKOUT NUMBER..LET'S WAIT FOR IT AS THE BTL...41.60 THE SST...WITH ANY BREAK OF 38 A REAL DISASTER...
KLAC---RIGHT AT HEAVY R BOTH AT THE DOWNTREND LINE AND THE 20 EMA...JUST DID THE 3BXRVUP LAST WEEK..VERY WEAK CHART THO FOLKS...29.80 THE BTL...27.60 THE SST...26 THE 3BXRVDN AND 25 DEATH AND DESTRUCTION...I MAY SHORT THIS ONE..MON/TUES...AHEAD OF INTC AND NVLS AH ON TUES..
CCMP---DCB HERE IS ALL..LOWER TOP SO FAR..MIGHT BE AN EXCELLENT SS CANDIDATE...HIT O/H R AT THE 20 EMA DCC...35.50 THE SST...38.55 THE BTL..
EBAY---THIS STOCK GAVE 2 CONSECUTIVE SELL SIGNALS BELOW THE BSL LINE, AND HAS RALLIED BACK UP HERE TO MAKE A LOWER TOP STILL BELOW BOTH THE BRL & BSL...57.25 THE BTL...55.20 THE GOOD SST THERE...53 THE 3BXRVDN..
EXPE---HOLY COW GIRL<G>...WHAT A WILD CHART?..BROKE DOWN FROM A RISING WEDGE AT 48 AND DROPPED LIKE A STONE ALL THE WAY TO 38..IT'S NOW RALLIED ALL THE WAY UP TO "OH GUESS WHERE" 48 AGAIN<VBG>..BUT..IT'S GIVEN A LOW POLE WARNING..BULLISH LONGER TERM..BUT RIGHT NOW LOOKS LIKE A NICE SS...HIT R AT THE 20 EMA TOO HERE...48.50 THE BTL..MIGHT GET TO 50/51 WITH A GOOD MARKET...46.25 THE SST...45 THE 3BXRVDN...
QLGC---A DOG WITH FLEAS..HAS EPS THIS WEEK..IT HIT THE BOTTOM OF THE 10 WEEK AT 20, AND TRIED LIKE HELL TO REV UP TO 23..NO GEEGAR FOLKS...WHAT WITH THAT 2 DAY RALLY??? DOES NOT BODE WELL FOR THIS STOCK THIS WEEK ME THINKS...JUST A HUNCH THO...MAYBE THEY'LL SURPRISE?..YEAH MAYBE NOT...HAHAHAHAHA DOJI ON THE DCC LAST FRIDAY...21.20 THE SST...22.90 THE BTL...
QCOM--- THIS IS NO DOG...RIGHT AT HEAVY R HERE AT 31 SO 32.20 THE BTL AND A BIG TIME BREAK OF THAT TRIPLE TOP..I'LL TAKE THAT TRADE LONG...30.20 THE SST...IT'S BEEN A BATTLE ON THE CHART SO FAR..
IBM---WELL SOMEONE UPGRADED THIS STOCK..ASHOK KUMAR OR DAN NILES FORGET WHICH..IT MATTERS NOT..BIG TIME GAP UP LAST FRIDAY...ABOVE THE 20 EMA...GAVE A BOTTOM FISH DT BUY SIGNAL ON P&F TOO..HAS O/H R AT 64..65 WOULD CLEAR IT ALL THE WAY OUT...ANY BETS??? IT HAS EPS ON WEDS ALONG WITH QLGC AND IDPH...65.20 THE BTL...62.65 THE SST..
INTC---EPS ON TUES AH...THIS SHOULD BE VERY INTERESTING FOR THE WHOLE MARKET...STRICTLY A DCB SO FAR...HAS R AT 15.50-- 16ISH...16 THE BTL...14 THE SST..
MERQ---A BIG POP ON THIS DOGGIE WITH FLEAS...HIT THE 40 EMA DCC...HAS EPS ON THURS...SEEMS AT SOME R HERE...20.10 THE SST...21.60 THE BTL...
NVLS---RIGHT AT HARD R HERE ON BOTH CHARTS..THE 20 EMA DCC..AND THE DT ON P&F...24.25 THE BTL...AND THE BUY SIGNAL ON P&F...22.20 THE SST...I THINK NVLS HAS WARNED A COUPLE OF TIMES HERE ABOUT PUSHOUTS AND CANCELLATIONS...
JPM---A MONEY CENTER BANK REPORTS ON WEDS..CHART LOOKS LOUSY..MAYBE EVEN WORSE<G>...TRYING TO BOUNCE HERE BUT I LIKE IT SS...18 THE BTL...AND THE 20 EMA...16.25 THE SST...ANY BREAK OF 15 TAKES IT MAYBE DOWN TO 8 OR 10..
MER--- LET'S TRY THIS ONE<g> TERRIBLE LOOKING CHART..WONDER WHY?...BOUNCED UP INTO O/H R AT THE 20 EMA..AND THE MIDDLE OF THE 10 WEEK FROM BELOW..33.20 THE BTL...31 THE SST...I LIKE IT SHORT..EPS ON WENS..
MMM---HITS THE DOWNSIDE TARGET RIGHT AT THE DOUBLE BOTTOM AT 110 AND THE BSL...EXCELLENT S THERE..BOUNCES UP WITH THE MARKET BUT VOLUME WAS A BIT LOW FOR ME...IT'S RIGHT ON THE 200 EMA DAILY..AND SOME R HERE AT 120 ON P&F...121.50 THE BTL...118.40 THE SST...
XLNX---EPS THURS...CHART IS WEAK..BOUNCE IS UP AGAINST HEAVY O/H R...15.30 THE SST...17 THE BTL...
OK ONE OF OUR SUBSCRIBERS ASKED ME FOR CLARIFICATION OF MY SHORT HAND SYMBOLS...SO LISTED BELOW IS THAT ANSWER..
BSL----BULLISH SUPPORT LINE--AN UPTREND LINE..AND IS EXCELLENT SUPPORT AREAS..
BRL---BEARISH RESISTANCE LINE---A DOWNTREND LINE...AND VERY STRONG RESISTANCE AREAS..
DCC--DAILY CANDLE CHART
O/H---OVERHEAD
O/S---OVERSOLD
BP'S---BULLISH PERCENTS--- STOCKS OR AN INDEX OR SECTOR ON BUY AND SELL SIGNALS..
R--RESISTANCE
S--SUPPORT
DT--DOUBLE TOP AREA
DB--DOUBLE BOTTOM AREA...
EMA---EXPONENTIAL MOVING AVERAGE ON QHCARTS AND MY CHARTS..RED IS 20 BLUE IS 40 BLACK IS THE 200..
3BXRVDN---3 BOX REVERSAL DOWN..OR CHANGE IN TREND..AND 3BXRVUP...SAME THING ONLY UP...
DCB---DEAD CAT BOUNCE..
BOTTOM FISH PLAY IS A STOCK OR INDEX THAT GIVES IT'S FIRST BUY SIGNAL OFF THE BOTTOM...IT USUALLY RETRACES BACK DOWN SOME WHAT...
10WKTB---THE 10 WEEK TRADING BAND...CAN BE HIGH AND OVERBOUGHT, OR LOW AND OVERSOLD..THESE EXTREME AREAS ARE 2-3 STANDARD DEVIATIONS FROM THE NORM..MEANING WHEN WE GET STRETCHED TO THIS AREA LIKE A RUBBER BAND WE REACT IN THE OPPOSITE DIRECTION TOWARD THE NORM OR THE MIDDLE....USUALLY WHEN YOUR BELOW THE BRL AND BSL YOU ONLY MOVE UP AND STAY BELOW..IF YOUR ABOVE BOTH THEN YOU PULLBACK BUT STAY ABOVE THOSE TWO LINES...EACH SHOWING EITHER STRENGTH OR WEAKNESS TO GO LONG OR SHORT THOSE STOCKS OR INDEXES WE TRADE...
HOPE THAT HELPS EVERYONE..IF ANYONE NEEDS CLARIFICATION..SEND ME AN E-MAIL...
OK THAT'S IT FOR NOW FOLKS...EARNINGS ARE OF THE ESSENCE THIS WEEK..IT'S EITHER PUT UP OR SHUT UP FOR ME...FORGET ALL THE OPINIONS OUT THERE..LET THE CORPORATIONS SHOW US THE MONEY...
STAY WELL AND FOCUSED..BE CALM AND RELAXED
WARMEST REGARDS TO YOU ALL
JERRY
Jerry Olson
MasterClassTraders.com
jerry@masterclasstraders.com
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