THIS WAS LAST SUNDAYS NEWSLETTER..NOTHING HAS CHANGED MY MIND TO DATE...I'VE BEEN DAYTRADING FOR NOW AND HAVE NXTL AS A POSITION TRADE...WILL ADD OTHER STOCKS WHEN WE PULLBACK...I'LL BE PATIENT...NO RUSH...
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JERRY OLSON'S NEWSLETTER
DATED OCT 27TH 2002
"FROTHY MOVE UP ON HOT AIR"
Hi there everyone, I hope you and yours are doing well these beautiful fall days...We always get this wonderful feeling as the seasons change as the leaves burst with all the colors of the rainbow, a wonderful time to be alive...
Ok I can not help how I feel..This rally is completely suspect to me...While I understand that the street is FORWARD looking, my question is this? How does it look going forward? Not great...Yes those wonderful corps beat lowered expectations, but who cares. It's what they all said about this Q and the coming 2003 time frame..A lot of companies are cutting Cap Ex still...How the heck can that be good???
What about these eco reports..Consumer Confidence is way low heading into Xmas. The only true sector that's holding up here is housing, and that's due for a BIG rest...It's way overbought on everything I see...Now if housing starts to slow and the consumer pulls in here where the hell is this market going???
Unless of course things truly change...Like I've been saying you have to SHOW ME THE MONEY before I invest MY MONEY in this market..I'll wait and watch, and if I miss something?? OH WELL! I want to see this next pullback from this frothy rally on fumes to see where it stops and reverses back up...when it happens I'll make a judgment there and then..I was trying to get long last week thinking hey we're doing alright. But we had 2 very serious distribution days on higher volume, and Fridays action was NOT bullish to me. Little volume on that rally up..The very next distribution day if we take out 873 Spooos you can forgatttabout it...So set alerts for the break DOWN "IF" and WHEN it happens...
Look for failed breakouts of these Inverse Head & Shoulders chart patterns on almost ALL indexes on the Daily Candle Charts, we are nearing the Sept 11th highs...Please check these out...the necklines are right here...watch for a spike above the necklines and then a severe pullback to TRAP the longs...We are right at the top here ready to pop for a little more upside before we pull back...Of course if we do not pop immediately next week then it's all over for now...We are short term overbought and due for a substantial move lower...Do not get euphoric, and stop thinking we can't correct...I am betting on it...
Now whats the game plan(again) when this pullback occurs?..We try to buy this dip using options..Jan Calls..IN THE MONIES..DO NOT BUY OUT OF THE MONIES PERIOD!!!!..So an example would be stock XYZ is at 53 it pullsback toward support at 47/48, and holds as the market begins to rally back up..you would buy the Jan 45 calls...The in the monies ITM...OK got that??? In last weeks newsletter I gave you examples of many stocks and strike prices to buy on the pullback..just re adjust the numbers and strikes...Now why I want you to use options instead of hard currency is the leverage you'll get without using a large portion of your sideline capital...A lot of brokerage houses allow STOPS on options..try to get to breakeven and then LET THE OPTION RUN ALL THE WAY AS FAR AS IT CAN DURING THE NOV-JAN TIME FRAME...Move your stops up but give yourself some breathing room as long as the market continues to climb during this very positive seasonality time frame...
If they do not allow stops on options then use the stock for your stop out...Meaning when /if the stock hits X price your gone!...Also if you can get 50% to 100% on your option trade take it..this is a wonderful profit for a small invest ment...and you may have 3-4 open positions working all at once...Do not get greedy here..That's a big time mistake..A mistake ALL option traders make...take the money and reenter on a pullback using the same stock different strike..it does not take a rocket scientist to execute this plan..it's simple easy and workable...
NOW LET'S CHECK OUT THE INDEXES AND PLEASE LOOK AT THE DAILY CANDLE CHARTS(DCC) OF ALL OF THESE..SET ALERTS PLEASE..VERY VERY IMPORTANT THIS WEEK..
DJIA---STRAIGHT UP FROM 7200 TO 8500 NON STOP..THIS INDEX BROKE THRU THE BRL LINE AT 8500 THIS IS BULLISH. 8200 IS A NORMAL 3 BOX REVERSAL BACK DOWN...8600 KEEPS IT IN X'S AND MOVING UP..9000 WOULD BE THE NEXT TARGET..BUT I THINK WE GET THAT PULLBACK FIRST...
DIA---USE THE DIA TO TRADE THE DOW..THIS IS FUN AND EASY TO TRADE...BOTH WAYS...THIS INDEX IS RIGHT AT THE BRL HERE...IT MAY MOVE LOWER OFF THAT TOUCH..IT TRADES 12 MILLION SHARES A DAY AND HAS OPTIONS TOO..KNOCK KNOCK HELLO?<G>....82 THE 3BXRVDN...86 KEEPS IT IN X;S...UPSIDE TARGET IS 91...A GREAT PROXY FOR THE DOW...IF YOU WAIT FOR A PB TO 82/81 AREA...YOU COULD BUY THE JAN 2003 STRIKE 82 DAV-AD FOR MAYBE 2-3 BUCKS...IF WE GOT TO 91 THAT WOULD BE AN AWESOME TRADE..RIGHT?....THINK ABOUT IT..
NAZ/COMPX---CHART IS GETTING TO LOOK BETTER HERE...IT'S STARTING TO DEVELOP MORE...THERE'S HARD R AT 1340, SO 1350 IS THE BREAKOUT OF THIS INDEX...1420 IS THE ULTIMATE TARGET..AT SOME POINT...CHECK OUT THE INVERSE HEAD AND SHOULDERS ON THIS DCC...1300 THE 3BXRVDN...
NDX---BROKE ABOVE THE MIDDLE OF THE 10 WEEK TRADING BAND(10WK)...AT 990...1000 KEEPS IT MOVING UP HERE...TARGET 1050...960 THE 3BXRVDN...
SOX---CONTINUES TO IMPROVE DESPITE DISMAL EPS FOR THE MAJOR STOCKS IN THIS GROUP...300 THE DT BUY AREA WHICH WOULD BE THE 4TH BUY SIGNAL IN A ROW OFF THE BOTTOM...THERE'S SOME R AT 310...WHEN YOU LOOK AT THE BULLISH PERCENT CHART(BP), THIS WAS A QUICK MOVE ON THIN AIR FROM THE LOW AT 8% TO RIGHT HERE AT 42%??? THAT WAS FAST FOLKS...TOO FAST FOR ME...THERE IS A BREAKOUT ON THE BP AT 44 WHICH WOULD PUT THIS INDICATOR IN "BULL CONFIRMED" STATUS...
SPX---905 IS THE TRIPLE TOP BREAKOUT...AND 870 IS A VERY SERIOUS BREAKDOWN...925/30 IS THE TARGET UP...THE 9/11 TOP OR DOUBLE TOP...IS AT 925..
SPZ2--SPOOS--ES02Z....908 THE DT BUY SIGNAL AND THIS INDEX OR THE FUTURES IS WORKING "ABOVE" THE BRL LINE WHICH IS GOOD. THAT 872 AREA IS BAD...PLEASE SET ALERTS ON THIS INDEX..
VIX---HEY THIS IS STRAIGHT DOWN 13 BOXES OR POINTS WITHOUT A REVERSAL UP...THE CHART HAS THE LOOK OF 30/31 COMING SOON...IF THIS HAPPENS THEN WE'LL BREAKOUT EVERYWHERE..SET ALERTS...40 IS THE 3BX RVUP...
OK LET'S CHECK ALL THESE TRADABLE STOCKS WE KNOW AND LOVE...
NXTL---I OWN THIS STOCK, GREAT CHART AND WILL HOLD AND ADD ON A PB...10.60 THE BTL...9.80 THE SST...
QLGC---BROKE THRU THE BRL AS I SOLD IT...I AM WAITING FOR THE NORMAL PB 3 BOXS FIRST TO GO LONG ON A POSITION TYPE TRADE, AS OF NOW THAT WOULD BE 30...34 THE BTL...32.20 THE SST...IF THIS STOCK FAILS ON MONDAY I MAY SHORT THIS ON A GAP UP...AND NOT WAIT FOR THE TRIGGER
KLAC---IT'S RIGHT AT THE BRL LINE HERE ON A DOUBLE TOP..SOUND FAMILIAR?...34.50 THE BTL--WITH A PRINT OF 35 VERY NICE...32.40 THE SST..ANY FAILURE OF THIS BREAKOUT AT 35 AND I WILL HIT THIS EARLY ON MONDAY AS A SS BEFORE THAT TRIGGER...ESPECIALLY IF THE MARKET GAPS UP AND ROLLS OVER..
AMGN---THIS STOCK IS EITHER IN A BULL FLAG ON THE DAILY OR IT'S BROKEN A RISING WEDGE TO THE DOWNSIDE...50.80 THE BTL..52 IS THE DOUBLE TOP...53 THE BREAKOUT....48.75 THE SST...
CCMP---THIS STOCK IS SETTING UP FOR A RALLY UP LARGE OR A BREAKDOWN, IT'S RIGHT IN THE MIDDLE HERE...45.40 THE BTL...43.10 THE SST...ANY BREAK OF 40 IS BAD...
EBAY---WHILE IT'S SHOWING GOOD RS IT TOUCHED A PRIOR HIGH AT 64 AND SOLD OFF THERE CAUSING A DARK CLOUD COVER 2 STICKS BACK ON THE DAILY...ON FRIDAY IT SHOWS A HAMMER THERE...63 THE BTL...60.95 THE SST AND A GOOD ONE...I THINK IT WOULD PULL ALL THE WAY BACK TO 57..
EXPE---WHAT A STOCK..DAMN IT...WE HAD IT POST MARKET AT 59.50 TALKING ABOUT TAKING IT LONG AND DID NOT DO IT..THE NEXT DAY IT WAS UP 6 POINTS???? WHEW!!!...67 25 THE BTL...68 IS THE TOP OF THE 10 WEEK...64.60 THE SST...
INVN---GREAT LOOKING CHART VERY INTERESTING TOO...IT SOLD OFF AFTER TOUCHING A DOUBLE TOP AREA AT 37 IS NOW PULLING BACK TOWARD THE RISING 20 EMA DCC...34.70 THE BTL...32.70 THE SST...I LIKE THIS ONE AS A POSITION LONG OPTION TRADE..QLGC TOO..MAYBE EVEN KLAC<G>...ON A PULLBACK FOLKS..
QCOM---BREAKS A SPREAD QUADRUPLE TOP AT 32 RUNS UP AND THRU THE BRL LINE AT THE TOP OF THE 10 WEEK NON STOP...37.60 THE BTL...CAREFUL OF A TOPPING PROCESS HERE ON MANY OF THESE HIGH FLYERS OFF THEIR RESPECTIVE LOWS TO THEIR HIGHS THEY'VE COME A LONG WAY VERY FAST......35.40 THE SST...
CEPH---HELD A TRIPLE BOTTOM AT 39 AND HAS RUN STRAIGHT UP TO 50 BUT IS RIGHT AT THE 200 EMA DCC...VERY OVERBOUGHT AND THE LAST 2 DAYS THIS STOCK WENT UP ON DECLINING VOLUME...NEGATIVE...51.50 THE BTL...49.40 THE SST...47 IS A NORMAL 3BXRVDN..
CHIR---ANOTHER SOLID BIO THAT TOPPED OUT AT THE DT 42...HAS MOVED LOWER HERE...39.70 THE BTL...38.40 THE SST...
ERTS--FABULOUS CHART PATTERN CRUSHED EPS BY 17 CENTS?...HAMMERED FRIDAY ON DECENT VOLUME THEY TOOK IT DOWN TO 64.25 AND RALLIED IT UP TO 67.72...SO 68.80 THE BTL...THAT WOULD REVERSE UP 3BX...66.30 THE SST...
INTU---SOME PROFIT TAKING ON THURS WITH A SMALL HANGING MAN ON FRIDAY..NICE CHART BUT IT COULD PB HERE IF THE MARKET MOVES LOWER THIS WEEK...50.90 THE BTL...48.40 THE SST..
MCHP---THIS STOCK DT AT 26 AND THEN SELLERS CAME IN AND IT BROKE A DB AT 22 ON VERY HEAVY SELLING ON THURS..CHECK THAT RED STICK ON THE VOLUME BAR...TRIED TO RALLY UP ON FRIDAY ON LOW VOL..NEGATIVE...25.10 THE BTL...23 THE SST...
MERQ---VERY EXTENDED CHART PATTERN HERE AT THE BRL...TRYING TO CONSOLIDATE FOR THE LAST 5 DAYS..AT THE HIGHS...26.60 THE BTL...24.40 THE SST...23 THE 3BXRVDN AND STARTS THIS PB AS A MAJOR SHORT...
ELX---OH ME OH MY...ANOTHER POST MARKET STOCK TRADE AS IT ANNOUNCED EXCELLENT EPS...SITTING THERE AT 15.10 FOR ALL OF US TO TAKE..THE NEXT DAY IT TOUCHED 18 ON HUGH VOLUME...WHAT A BUMMER...IT'S EXTENDED HERE...TOUCHING THE BRL LINE...18.50 THE BTL...17.20 THE SST...
IBM---THERE ARE SO MANY GAPS IN THE DCC IT'S NOT EVEN FUNNY..SOME OF THESE GAPS WILL BE FILLED BET ON IT...75.70 THE BTL...73.40 THE SST...ALREADY REV DOWN HERE AS IT TOUCHED 72 SO ANY BREAK BELOW 72 IS NEGATIVE...
ROOM---THIS THING IS SO EXTENDED IT'S NOT EVEN FUNNY...WHEN IT ROLLS OVER HERE IT'S, NOT GOING TO BE PRETTY...61.50 THE BTL...59.20 THE SST...59 IS THE 3BXRVDN...WATCHING THIS COULD BE AN AWESOME SHORT...
INTC---RIGHT AT HEAVY R HERE AT THE DT AT THE BRL...HELLO?...17.50 WOULD COMPLETELY NEGATE THAT TROUBLE SPOT...BUT THE BTL...IS 17.10 THEN LOOK FOR IT TO BREAK 17.50..THE SST IS AT 16....
AMAT---ALL THE SEMIS ARE AT THE DREADED BRL LINE HERE...KLAC INTC AMAT ETC...THIS AFTER GIVING THERE BOTTOM FISH BUY SIGNALS OFF THE LOWS...THE CHARTS NEED TO DEVELOPE OVER TIME...OF COURSE MANY WILL BREAKOUT HERE ONLY TO FAIL AND PULLBACK ANYWAY...15.25 THE BTL...14.00 THE SST...
OK HEADSUP HERE...LAST WEEK WE HAD 2 DISTRIBUTION DAYS ON HEAVY VOLUME...FRIDAYS ACTION WAS ANEMIC AT BEST EVEN THO IT LOOKED OK...IT WAS NOT..WE MAY GAP UP EARLY ON MONDAY, BUT BE CAREFUL AND WATCH FOR ANY WEAKNESS AND A ROLL OVER MOVE LATER IN THE DAY..WERE THIS TO HAPPEN AND WE BREAK AT ANY TIME 872 SPOOOS OR SPX..WE ARE GOING TO CORRECT RIGHT HERE...BE CAREFUL..SET ALERTS, WATCH YOUR FAVORITE STOCKS FOR THAT SPECIAL PULLBACK AREA TO BUY THOSE JAN CALLS...
BEST OF LUCK..STAY FOCUSED AND THINK THINK THINK...
JER
VXN---A BREAK OF 50 IS THE 4TH CONSECUTIVE SELL SIGNAL IN THIS CHART...TARGET IS 45 THE ULTIMATE LOW FOR THIS INDEX AS WE TOPPED OUT ON 9/11 AND THEN FELL LIKE A STONE INTO THE OCT 10TH LOW AS THIS INDEX RALLIED BACK UP...GOT THAT? IF IT TOUCHES 45 THAT WOULD BE A NEGATIVE TO ME, A BIG TIME NEGATIVE...
BTK---HARD R AT 355 THE DT AT THE BRL...360 IS A VERY NICE BREAKOUT AREA...IT'S A BULLISH CATAPULT...GET LONG THE BBH RIGHT THERE...NOW IF IT PRINTS 335 THEN IT'S STILL MOVING LOWER ON THIS PULLBACK...
BBH--GREAT CHART PATTERN...THIS IS A BUY ON PB TYPE CHART...BROKE OUT OF A BULLISH TRIANGLE AT 83 TOUCHED 89 AND WOULD BE A NICE BUY AT 82/83 AREA...
Jerry Olson
jerry.olson@verizon.net
www.buyitbuyitsellitsellit.com |
