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Strategies & Market Trends : Effective Trading In Our Markets. Learn, then Earn

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To: Jerry Olson who wrote (1824)	10/27/2002 10:04:13 AM
From: Jerry Olson	Read Replies (1) of 1854

I'M STILL NOT CONVINCED?...BUT WILL RIDE ALONG EACH DAY TILL WE HAVE A CORRECTION FROM THIS FROTH...HERE'S LAST WEEKS NEWSLETTER FOR THE TROOPS... $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ JERRY OLSON'S "POINT" OF VIEW NEWSLETTER DATED 20TH OCTOBER 2002 "IS THIS FOR REAL? OR IS IT MEMOREX!" Hello out there all my favorite people in cyberworld...Well fall is here, and I don't like it<G>....Cold somehow goes right thru my old bones...hahahahaa...Hope this letter finds all of you in fine health and spirits... Well for some nutty reason I am still NOT completely convinced of this rally..I know it looks like it's real right? Heck it even has people diving into the abyss right now chasing that ballistic run we just had...I'll wait for the inevitable pullback folks...These type rallies always pullback..ALWAYS!... There's a large amount of differing opinions on this rally that it has people a bit baffled..The biggest positive is the current area of seasonality..As for earnings that lye just ahead? I think they'll stink the joint out..While the euphoric Wall Street Wizards are trying to put a good spin on things in general..They're not good...In general earnings are getting worse not better..So they beat lowered estimates whooped de do da...thatsa nice right? Like MSFT they beat handily lowered numbers and the street loved that news, but warned they would miss by 5 cents in this Q?, Of course the street chose to ignore that small piece of info..That's fine...just don't you ignore it...The semis are still having serious problems all the way around. Did you see that Book To Bill number this week at 84!!!! Now that's as bad as it can get down from 127 in June I think and moving lower every single month since that top...Orders? what orders? there are none...Only cancellations and pushouts... Yes of course that could all change..But INTC warned that they are reducing 2003 Cap ex to 4 bil from 5.5 Bil..hello? knock knock anyone home?...I'm sorry if i'm being overly cautious here. Hey this is OUR MONEY we're risking here folks...So we missed this last move up..so what...there will be a PULLBACK to buy IF it's REAL...I'll have those numbers below.. And what if this was nothing more than the very same scenario last July thru the August top? huh? Think it can't roll over and crash and burn all those longs? Bet your whole house it could...Not saying it WILL, just saying it COULD...So I would opt on the side of cautious investing..Not going hog wild here and not using ALL of your investable sideline cash either..Keep some powder dry if this IS in fact the real thing...I'll know more as this whole move unfolds..When I address all the indexes below you'll see why I am cautious..Oh trust me I'll play caboose for sure..If they wanna take this monster up I'll ride along that move with you...So no fear of MISSING anything... I think it's time to address how you're going to trade this rally...I would like you to use ETF's and IShares and some index options as well...It's a lot safer than trying to cherry pick 1 stock..You can trade these funds just like stocks, write options against them, short them etc..a perfect way to participate without going too deeply overboard...So let's get started with some plays as we go thru the INDEXS...and the BULLISH PERCENTS INDICATORS... DJIA---THERE'S A NICE LOOKING SET UP FOR A RUN UP TO 8750/8800, BUT IT MUST BREAK 8400 FIRST. WE ARE MAKING HIGHER LOWS AND HIGHER TOPS SO FAR...LAST WEEK THE NYSE BP REVERSED BACK UP INTO X'S A BIG BIG POSITIVE FOR ME...IT'S AT 31% FROM HOLDING A DOUBLE BOTTOM(DB) AT 24%...WHAT WOULD BE IDEAL HERE IS IF WE DO GET A PULLBACK TO SAY 8000/8100 AND THEN BEGIN TO POP, THAT WOULD BE THE TIME TO HIT IT HARD FROM THE LONG SIDE...ANY BREAK OF 8000 WOULD BE A BIG TIME NEGATIVE TO ME...SO LOOK FOR EITHER A POP OVER 8400 NOW, OR THE PULLBACK THIS WEEK TO 8100 TO BUY IT... NOW HOW ARE YOU GOING TO TRADE THIS...USE THE DIA OR THE OEX...YOU CAN TRADE THE OEX INTRADAY FOR SCALP AND DAYTRADES EVEN SWING AND POSITION TYPE TRADES...AND AS FOR THE DIA'S I WOULD USE OPTIONS ON THAT INDEX FOR JAN TO GET THE "FULL" MOVE UP "IF" WE GET IT...THE JAN 2003 80 STRIKE CALLS "DAV-AB" ARE RIGHT AT ABOUT $7.00..YOU CAN BUY 1/2 HERE AND THE OTHER 1/2 ON THE PULLBACK, OR WAIT FOR THE PULLBACK AND THEN BUY THEM...THIS GIVES YOU 3 MONTHS OF TIME AND 10-1 LEVERAGE FOR THE TRADE..VERY NICE...BTW IF WE TANK BUY THE SAME STRIKE PUTS<G>...I WOULD USE THE OEX MORE FOR SWING AND DAYTRADES USING NOV CALLS..THE PREMIUM IS SO LARGE GOING INTO DEC AND JAN IT DOES NOT PAY..JUST TRADE THE NOV'S... NAZ/COMPX---READY TO BREAK A DT(DOUBLE TOP) AT 1290 IT'S RIGHT AT THE MIDDLE OF THE 10 WEEK TRADING BAND(10WK)...THIS CHART PATTERN IS A BULLISH CATAPULT FORMATION THE ACTUAL UPSIDE TARGET WOULD BE 1420 THE OLD AUG TOP...THIS INDEX HAS MINOR R AT 1340/50 AREA...THE BULLISH PERCENT(BP) ON THE OTC IS JUST .50% AWAY FROM A REVERSAL BACK UP..VERY VERY POSITIVE...IT HELD SOLID S AT 22% NEEDS 28% TO REVERSE BACK UP..BUT EVEN MORE IMPORTANTLY IT NEEDS TO TAKE OUT 36%..THIS IS A MUST OTHERWISE THIS INDEX AND THE TECHS WILL FAIL...NOW AS FOR THE DOWNSIDE ON THE COMPX THE 3 BOX RV DOWN IS AT 1250 BUT ANY BREAK OF 1220 WOULD BE A BIG TIME NO NO... BTK---HAS REVERSED UP ON THE DEFAULT CHART 3 BOXES..LOOKING AT THE SHORT TIME FRAME CHART 10 POINTER..THIS INDEX BROKE DOWN AT 320 REMEMBER? AND BROKE THE BSL LINE TOO..IT HAS SINCE RALLIED UP 4 BOXES TO THE CURRENT PRICE OF 350..EITHER IT CONTINUES UP TO THE BRL LINE AT 380 OR IT COULD REVERSE BACK DOWN HERE..THE BPBIOM IS AT 26% UP FROM 20%..NOT MUCH OF A MOVE WITH THIS RALLY...WE'VE ALL SEEN HOW THE MAJOR 5-6 STOCKS WE PLAY HAVE MOVED UP SHARPLY BUT I'M NOT SO SURE ABOUT ALL THIS JUST YET...A BREAK OVER 360 WOULD BE BETTER...320 IS THE 3BXRVDN--- USING THE BBH HERE TO TRADE THE BTK THIS IS THE GAME PLAN...THIS INDEX REALLY BROKE OUT AS IT POPPED OUT OF A BEAUTIFUL TRIANGLE ON P&F AT 83 AND RAN UP TO 89...WHILE HOLDING THE BULLISH SUPPORT LINE(BSL) ALL THRU THIS LAST MOVE...MAKING HIGHER LOWS ALL THE WHILE..IT COULD JUST RUN UP TO O/H R AT A DT AT 93..OR PULLBACK TO A MORE TRADABLE LEVEL AT 85...IF IT DOES PB TO 85 BUY THE JAN 85 CALLS BBH-AQ THEIR PRICED AT $10 BUCKS RIGHT HERE..THE PULLBACK WOULD BE COOL FOR THE LONGSIDE...AND THE PRICE CHEAPER...I'D LIKE TO SEE THE BIO TECH BP BREAKOUT AT 36%... SOX---WHILE YOU KNOW HOW I FEEL ABOUT THE SEMIS IN GENERAL...FAR BE IT FOR ME TO IGNORE "IRRATIONAL EXUBERANCE" IF THEY WANT TO BUY THIS GROUP AS THE MARKET CONTINUES TO RALLY THRU THE FALL...HECK I'LL RIDE THAT TRAIN..ALSO LET'S NOT FORGET THE MARKET IS ALWAYS HOPEFUL AND FORWARD LOOKING SO WE COULD CATCH THIS TRAIN RIGHT HERE...270 IS A SPREAD QUADRUPLE TOP BREAKOUT..AND IT LOOKS LIKE IT'S GOING TO POP HERE...310 IS A POSSIBILITY IF IT CAN GET THRU 285 FIRST...THE MIDDLE OF THE 10 WK..250 IS THE 3BXRVDN...240 IS A NO NO... THE SMH WOULD BE A DECENT WAY TO PLAY THIS BREAKOUT IF IT HAPPENS...BUY THE JAN 2003 17.50 CALLS CURRENTLY PRICED AT $5.50..SO YOU'RE ONLY PAYING $1.00 PREMIUM FOR THIS 3 MONTH TRADE...AND FOLKS IF THE MARKET RALLIES THIS FALL SO WILL THE SEMIS WITHOUT A DOUBT...THE SEMI BP HAS REVERSED UP HERE AFTER HOLDING HISTORICAL LOWS AT 8%..IT'S NOW 20%..LATELY THO IT'S BEEN PRONE TO QUICK DOWNSIDE REVERSALS I'LL BE WATCHING ALL THESE BP'S FOR ANY SIGNS OF WEAKNESS..MEANING A "DIVERGENCE" OF THE MARKETS DIRECTION...THIS BP MOVES VERY FAST TOO...I THINK THE SMH IN A GOOD MARKET CAN GET TO 26, YOU WOULD BE WORTH $8.50 FOR A 60% PROFIT ON THAT TRADE...BTW 19.50 IS THE 3BXRVDN ON THE SMH...AN EXCELLENT ENTRY IF WE'RE STILL ALIVE<VBG>... NDX---THIS WAS ALWAYS THE WEAKEST LINK THROUGH THE WHOLE MASSACRE...SO FROM 800 WE EXPLODE UP TO 950 WHOOOSH...900 WAS THE BREAKOUT AREA..AND WE'RE RIGHT AT A DOUBLE TOP AREA AT 950..SO 960 IS THE BREAKOUT..THERE'S SOME R AT 970 AND AGAIN AT 990..BTW ANY BREAK OF 900 WOULD BE A BIG TIME NEGATIVE FOR ME...THE BPNDX HAS SCREAMED UP TO 42% VERY FAST..MAYBE TOO FAST...SO I'LL BE WATCHING IT HERE... QQQ'S---THE WAY TO TRY AND PLAY THIS INDEX IS USING CALLS...IT JUST REVERSED UP 3 BOXES AND IT TOOK 150 POINT MOVE IN THE NDX TO DO THIS...SO FIGURE 50 POINTS PER 1 POINT MOVE...YOU COULD BUY THE JAN 2003 22 STRIKE FOR $3.20 AND LOOK FOR A POTENTIAL RUN TO 28 THE TOP OF THE 10WK...A SHORTER TERM TARGET COULD BE THE 8/22 HIGHS...THE SYMBOL IS THE QAV-AU NOT TOO BAD A PRICE FOR 3 MONTHS OF ACTION<VBG>... VXN---AN ALL IMPORTANT INDEX FOR ME AS IS THE VIX...THIS INDEX BROKE A BEARISH CATAPULT LAST WEEK AS THE MARKETS RALLIED UP ALMOST 6%...IT FORETELLS BETTER TIMES AHEAD..."UNLESS" IT BREAKS A NEAR TERM DT AT 60..THAT WOULD PROBABLY NEGATE THIS WHOLE MOVE...IT REVERSED BACK UP ON FRIDAY 3 BOXS TO 57 BUT FINISHED NEAR THE LOD(LOW OF THE DAY) AT 55.39...WE NEED IT TO CONTINUE TO FALL HERE OR BE CAREFUL...A PRINT OF 53 WOULD BE VERY VERY BULLISH FOR ME...THIS INDEX BROKE A RISING WEDGE TO THE DOWNSIDE..ANOTHER POSITIVE.. VIX---SAME PROBLEM AS THE VXN ONLY IT WENT STRAIGHT DOWN AS THE DOW EXPLODED 1000 STRAIGHT UP POINTS...43 IS THE 3BX RV UP AND A SERIOUS BREAK OF THIS TREND DOWN..THERE'S GOOD S AT 36 A DOUBLE BOTTOM AREA...SO LET'S SEE WHAT HAPPENS NEXT WEEK...THE WEEK "AFTER" OPEX... SPX---THERE'S AN INTERESTING HAMMER ON THE DCC CHART...IN FACT IT'S ON MANY INDEX CHARTS CHECK THEM ALL OUT..EVERYTHING IS SET UP FOR A BLOWOUT BREAKOUT RIGHT??? LET ME SAY IT BETTER HAPPEN MONDAY OR TUES...890 IS A MAJOR LEAGUE BREAKOUT FOR THE SPX..MAJOR!!!! IF WE TAKE OUT FRIDAYS LOWS AT 865 THAT WOULD DISTURB ME A BIT...WILL BE WATCHING LIKE A HAWK..AND PLEASE SET ALERTS ON EVERY SINGLE NUMBER ON ALL INDEXS.. SPZ2--SPOOOS--ES02Z---IDENTICAL CHART PATTERN ON CANDLE STICKS..A DOJI HAMMER..WATCH FOR A FAKEOUT BREAKOUT...IN OTHER WORDS IF THEY TAKE IT UP AND TANK IT LATE MONDAY I'LL BE SHORTING THE WHOLE MARKET...IF THEY CONTINUE IT UP WE'LL GET SKINNY LONG...<VBG>... OK LET'S CHECK OUT THE STOCKS WE KNOW AND LOVE...I AM SCANNING FOR BREAKOUTS HERE...AND OF COURSE BREAKDOWNS TOO<G>.. CCMP---I LIKE THE CHART PATTERN HERE...43.50 THE VERY NICE BTL---41.40 THE SST... AMGN---LOOKS LIKE A POTENTIAL SS...ON A HIGH POLE..AT R...51.50 THE BTL...49.40 THE SST.. QCOM---RIGHT AT THE BRL--37.25 THE BTL---35.25 THE SST...33 THE 3BXRVDN MCHP---EPS ON THE 23RD...ALREADY REVERSED DOWN 3BOXES...25.50 THE BTL...26 THE DT R THERE..27 THE BUY SIGNAL ON P&F...23.45 THE SST...TAKES OUT FRIDAYS LOD TOO.. CEPH---I REALLY LIKE THIS BIO TECH..THE CHART IS SCREAMING FOR HIGHER PRICES MARKET WILLING...48.40 THE BTL...HECK THE AUGUST TOP IS AT 53????...AND MADE A PRETTY BASE HERE SINCE THEN...46.25 THE SST.. QLGC---EVEN WITH GOOD EPS..STILL INDECISION FOR THE STREET..BUT IT'S SETTING UP HERE FOR A POP...29.75 THE BTL..LOOK THERE IS HEAVY R AT A TRIPLE TOP AT 30..SO BE CAREFUL..31 IS A BLOWOUT BREAKOUT...27.50 THE SST... CHIR---EPS THIS WEEK ON THE 23RD STILL NOT TOO OVERBOUGHT..JUST A HEADSUP THIS STOCK IS RIGHT AT THE AUGUST HIGHS IN A GREAT LOOKING CUP WITH HANDLE...CHECK IT ON THE DCC...43.60 THE BTL...41.50 THE GOOD SST.. IDPH---BROKE THRU THE BRL LAST WEEK...44.65 THE BTL...42.30 THE SST... EBAY---WELL HERE WE ARE AGAIN..RIGHT AT R AT THE BRL...HUGH BULLISH STICK ON FRIDAY..HUGH...61 THE BTL WAIT FOR IT FOR SURE...58.75 THE SST... KLAC---BOTTOM FISH SEMI BROKE A DT AT 31...33.75 THE BTL...COULD GET TO 35/36 THE BRL..32.10 THE SST... ADBE--BROKE A SPREAD QUINTUPLE TOP FOLKS..THATS NICE<G>...24.70 THE BTL...23.10 THE SST... INTU---WE TALK ABOUT THIS ONE IN THE ROOM ALL THE TIME..SOLID CHART TOOK OUT THE AUG TOP...52.30 THE BTL...50.40 THE SST... ERTS---THIS ONE IS JUST TOO STRONG HERE...HELD THE BSL ALL THE WAY THRU THIS MESS...71.00 THE BTL...69 THE SST...ON ANY PULLBACK YOU COULD BUY THE JAN CALLS ON THIS STOCK..THERE'S A PO AT 89/90... IBM---THERE SURE ARE A LOT OF GAPS IN THIS CHART FOLKS...RAN UP FROM 55 TO 74 NON STOP AND IS DUE FOR A SOLID PULLBACK...IT'S TOUCHING THE BRL LINE HERE...75.30 THE BTL...72.90 THE SST... INVN--NICE PB TO THE BSL AND REVERSAL BACK UP..EPS ON THE 22ND SHOULD BE NICE...36.25 THE BTL...34.25 THE SST... MYGN---TRYING TO PERFORM HERE ALONG WITH THE OTHER BIO'S...18.90 THE BTL AND A GOOD ONE...17.10 THE GOOD SST..IT MAY PB HERE AFTER A STRONG MOVE UP TO THE BRL... MERQ---LOOKING LIKE A GOOD SHORT HERE AT THE BRL...HOWEVER...25.30 THE BTL...23.20 THE SST..WITH 21 THE 3BXRVDN.. ROOM---BIG RALLY OFF THE LOWS FROM 42 TO 57 A LITTLE TOO MUCH WITH EPS ON THE 23RD THEY MAY SELL THE NEWS HERE...56.90 THE BTL...54.75 THE SST...54 THE 3BXRVDN EXPE---HEAVY O/H R AT 55 AND RIGHT THERE IS THE BRL TOO...OH AND THE 200 ON THE DCC IS RIGHT THERE TOO..HMMM...54.90 THE BTL<G>...MUST PRINT 56 TO STAY LONG...52.70 THE GOOD SST... AMZN---EPS ON THE 24TH...SO BE CAREFUL...20 IS THE BTL...21 A TRIPLE TOP BREAKOUT...18 THE SST AND A GOOD ONE... OK EVERYONE..THATS IT FOR THIS WEEK...THIS TO ME WILL BE THE MOST CRITICAL WEEK OF THE FALL...LET'S WATCH HOW IT UNFOLDS..IF WE CONTINUE UP UN ABATED? THEN WE FOLLOW ALONG WITH TRAILING STOPS..IF WE GAP UP AND CRASH SETTING UP SHORTS THEN TAKE THEM...DON'T BE BASHFUL<VBG>..ALSO GO TO WWW.ISHARES.COM TO CHECK OUT ALL THESE INDEXS TO TRADE..AS THE BP'S REVERSE BACK UP I'LL REPORT WHICH SECTORS ARE POSITIVE..AND AS OF NOW ALMOST ALL SECTORS HAVE REVERSED BACK UP AT VERY LOW LEVELS... HAVE A GREAT TRADING WEEK BEST REGARDS JER Jerry Olson jerry.olson@verizon.net www.buyitbuyitsellitsellit.com

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