My Newsletter from the 30th 2 weeks ago..
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JERRY OLSON'S
"POINT" OF VIEW NEWSLETTER
DATED MARCH 30TH 2003
"STEALTH BUYING DURING CONSOLIDATION"
Hello everyone...I hope this letter finds you all in the best of health and spirits..We all wish our troops God speed in this current War environment...Let them come home safe and sound...and quickly please....
Let me get right to the point here. I am seeing stealth buying late in the day as we pullback and consolidate from that massive rally off the March 12th lows...Remember this folks, we shot up a zillion points in 8 days, and of course there would be some sort of pullback and consolidation phase...Prior to this War in in the first week or so, I wrote about NOT seeing anything of any reversal in my indicators...Well things have change dramatically...Markets always need a breather after major moves either way.
Why is this buying occurring at 3.30ish everyday?. So far the sellers have NOT been able to push this market down. That the volume has slowed dramatically as well which is a very good sign...I am short term bullish here...Not only did the rally remove that enormous oversold condition quickly..it did it too quickly..But it had a good effect on P&F indicators and my Daily Candle Charts (DCC) as well...
I had a hard look at those indicators this weekend...and boy oh boy things have really shaped up...The NYSE BP(Bullish Percent) is less than 1% away from a reversal back up... .76% exactly...We now have 4 short term indicators and 1 major one in X's and moving up..The OCT BP which is lagging is at 37.95% and needs 40% to reverse up...If that happens along with the NYSE which will reverse before the OTC, we'll be clown long<G>...Do not get me wrong..and i'm not hedging..but anything can happen..we could just crash and burn too..so be cool ok?
The thing that excites me is that the street is extremely skeptical of any "possible" rally, and thinks we're going to hell in a hand basket...Folks anything IS possible..but not with the current "look" of these indicators and the DCC charts..In fact there are some descending wedges on 2 big indexes...COMPX & INDU(DOW). I put a projection tool on the DOW and there's a projection up here of 8800, as long as we do not break 80007950 area...What is very interesting here is the COMPX projects to 1470...not too shabby from here...we just need to break the trend line...
So I think it's time to take some side line cash out of that trunk, dust it off, yeah those benji's..hahahahaa, and let's put some money to work long...
First I want you all to use the ETF's..SMH--BBH--HHH--PPH--QQQ--SPY--DIA- -ETC...IT'S TOO TOUGH TO BUY INDIVIDUAL STOCKS...Next leg into these positions starting this week...example..
SMH---THIS INDEX HIT THE 200 EMA DCC AT 26, AND A DOUBLE TOP AT 26 AND RETREATED...23 IS THE 3 BOX REVERSAL BACK DOWN...I HAVE SUCCESSFULLY TRADED THIS ETF FOR YEARS...YOU NEED TO DO IT TOO..IT DOES "NOT" MOVE FAST...THAT'S WHAT WE WANT...YOU CAN USE A BIT LARGER LOT SIZE TO TRADE THIS TOO..AND YOU OPTION TRADERS CAN BUY LONG CALLS USING THE JULY/AUG TIME FRAME OF "IN THE MONEY" CALLS ONLY..
SO FOR STOCK BUYERS ON MONDAY-TUESDAY BUY 1/2 POSITION NEAR 24 OR 23 IF WE GET THERE EVEN BETTER, AND PLACE A SOLID HARD STOP AT 21.34 ABOUT A 10% STOP LOSS...YOU MAY WISH TO WAIT FOR THE 3 BOX REVERSAL DOWN...AND THEN LEG IN..I DO "NOT" WANT YOU TO AVERAGE DOWN...ONLY AVERAGE UP...FOR YOU OPTION TRADERS TRY THE AUG 22.50 CALLS THESE ARE IN THE MONEY AND THE PRICE IS ABOUT $4.00 PER CONTRACT...I WANT YOU TO HAVE "TIME" ON YOUR SIDE FOR THIS TO COOK AND WORK...APR/MAY IS TOO CLOSE...WHAT WITH THE UNCERTAINTY OUT THERE DURING THIS WAR...SO YOU BUY SAY 5 CONTRACTS FOR $2000.00 OR 10 OR 1-2-3 WHAT EVER MAKES YOU FEEL COMFORTABLE...IF WE PB LOWER THEN USE THE AUG 20'S...
LET ME GIVE YOU A BASIS FOR THIS TRADE..IF YOU TRADE 500 SHARES OF STOCK PER TRADE THEN DO NOT BUY 20 CONTRACTS OF THESE OPTIONS...USE 5 CONTRACTS TO EQUAL WHAT YOUR COMFORTABLE WITH TRADING. SO BUY 2-3 FIRST THEN ADD MORE LATER AS WE MOVE "UP" NOT DOWN..EVEN THO AS WE MOVE LOWER THE PRICE OF THE OPTION WILL BE CHEAPER..YOU MAY NEVER RECOVER THAT CASH IF WE STAY UNDER THAT STRIKE PRICE...GOT THAT? IF YOU MAKE THIS TRADE SAY FOR $2000.00 FOR 5 CONTRACTS THEN THAT IS THE MOST YOU CAN LOSE...AND WHAT WITH TIME ON YOUR SIDE YOU HAVE A REAL SHOT AT MAKING GOOD MONEY ON DOWN THE ROAD...1 CONTRACT EQUALS 100 SHARES OF STOCK...SO YOU'LL CONTROL 500 SHARES AT 5 CONTRACTS...
THE OPTION SYMBOL IS....SMH HX---THE AUG 22.50 STRIKE CALLS...LET'S SEE WHAT MON/TUES BRINGS US...
NOW I WANT YOU TO CHECK ALL THE OTHER ETF'S I POSTED ABOVE AND SEE WHAT YOU WISH TO DO...THERE ARE OPTIONS AND/OR STOCK TO TRADE THAT MIMIC EACH INDEX...A GREAT WAY TO PARTICIPATE IN THE MARKETS IN GENERAL BOTH UP OR DOWN...DO NOT MORTGAGE THE HOUSE FOLKS<vbg>...TAKE IT EASY...I AM ALONE IN MY THINKING HERE..EVERY GURU(I AM NOT ONE) IS SCREAMING CRASH HERE...I LOVE THAT...LOOK I'M NIMBLE, I CAN EXTRICATE MYSELF OUT OF ANY POSITION AND USUALLY COME OUT SMELLIN' LIKE A ROSE..MANY OF MY TRADING BUDDIES KNOW THIS TO BE TRUE...SO "IF" I'M WRONG I'LL LIVE.
RIGHT NOW I AM LONG THE SMH--BBH--PG--IBM--ELX--MRK--FOR STARTERS...I WILL ADD AS THEY BREAK OUT IF THE MOVE IS STRONG ENOUGH...
OK LET'S CHECK THE INDEXS...THE POINT & FIGURE INDICATORS ARE GETTING NICELY BULLISH RIGHT HERE...
DJIA---EXPLOSIVE RALLY OFF THAT MID DAY REVERSAL ON MARCH 12TH ABOUT 1000 POINTS LIKE A ROCKET...IT TOPPED OUT AT 8500 WELL ABOVE THE BRL LINE THIS IS CALLED THE BEARISH RESISTANCE LINE AND IS USUALLY VERY TOUGH TO BREAK THRU...WE HAVE NOW PULLED BACK(PB) 7 BOXES OR ABOUT 1/3 RETRACE...8000 IS THE MIDDLE OF THE 10 WEEK TRADING BAND...THIS BAND IS THE 50 100 AN 200 EMA'S ON THE P&F CHARTS...WE ARE CURRENTLY SITTING ON 2 TIME FRAMES AT THE 20 & 40 EMA'S ON THE DCC...ANYTHING THAT BREAKS LOWER BELOW 7950ISH WOULD BE NEGATIVE TO ME...WE ARE MOVING BACK FROM THAT RECENT TOP ON LOWER AND LOWER VOLUME WHICH IS BULLISH..THE CHART PATTERN SUGGESTS A FLAG PB...THAT'S BULLISH...WE SHALL SEE...
COMPX--NAZ---HOLDING FOR A WEEK NOW AT 1368/70 AREA. ANY BREAK OF 1360 WOULD KNOCK IT DOWN TO 1330 AND THE MIDDLE OF THE 10 WEEK...1400 IS R(RESISTANCE) 1420 IS TOUGH R TOO..LOTS OF O/H(OVERHEAD) R AS IT MOVES UP...1430 IS A BIG B/O...THIS DCC IS IN A DESCENDING WEDGE TOO...
SOX---BROKE THRU THE BRL LINE AS IT THRUSTED UP OFF THE RECENT LOWS AND TOUCHED 335...IT HAS NOW REVERSED BACK DOWN TO 310..AND AT THE 20 EMA DCC...THE SEMI BP IS AT 39.34 SLIGHTLY DOWN FROM 40%...THE SOX CONTROLS THE SMH...BTW...THE 3 TOP NAMES IN THE SMH ARE INTC--TXN--AMAT THEY CONTROL 50% OF THIS INDEX..SO WATCH THEM CAREFULLY...
NDX---THE BP(BULLISH PERCENT) OF THE NDX IS AT A COMFORTABLE 49% IT RECENTLY TOPPED OUT AT 82%..NOW THAT WAS SOME MOVE...THIS INDEX HIT 1090 UP FROM 950..A POWERFUL RUN FOR SURE...IT'S ONLY REVERSED BACK DOWN 3 BOXES SO FAR AND 1020-30 LOOKS LIKE GOOD SUPPORT(S)...THAT'S WHERE THIS INDEX BROKE OUT FROM...
BTK---NOW MOVING SIDEWAYS FOR 8 STRAIGHT DAYS...STILL LAGGING THE TECH SECTOR..BUT I LIKE THE ODDS OF A BREAKOUT SOON..I AM LONG THE BBH AS A PROXY FOR THIS INDEX...355 IS A BIG BREAKOUT THE BP BIOM IS AT 27.85 AND 32% IS THE 3 BOX REVERSAL BACK UP WHICH WOULD MAKE ME EVEN MORE BULLISH...330 IS THE MIDDLE OF THE 10 WEEK TRADING BAND(10WK)...
SPM3---THE FUTURES THE SPOOOS---BROKE A DOUBLE BOTTOM(DB) AT 860 ANY MOVE LOWER OF 852 WOULD BE A NEGATIVE FOR SURE..844 IS THE TARGET "IF" THAT HAPPENS...THE "LOOK" OF THE DCC CHART IS NEGATIVE HERE..IT NEEDS TO POP IMMEDIATELY...
NQM3--THE NAZ FUTURES---VERY NICE P&F CHART AND AN ORDERLY PB SO FAR. 1030 IS A SOLID SUPPORT AREA...
SPX---BP IS AT 41.60 AND MOVING HIGHER HERE..LOOKS GOOD MAKING HIGHER LOWS TOO..COULD GET TO 66% THAT'S BIG...IT BROKE THRU THE BRL LINE AT 880 HIT 895 A FULL 105 POINTS STRAIGHT UP FROM THE LOWS...845 IS A 50% PB AND THE MID OF THE 10WK...
VIX---BIG BREAKDOWN AT 32, I HAVE 27 AS MY 1ST TARGET WITH ANY BREAK OF THAT WE GO TO 23...MEANS A BIG RALLY IN THE MARKETS...THAT'S THE BOTTOM OF THE 10WK...35 THE 3 BOX UP...38 A BIG BREAKOUT..
VXN---SAME CHART AS THE VIX 41 IS THE LAST LINE IN THE SAND SET ALERTS..36 IS THE TARGET IF IT'S BROKEN...
OK THAT'S IT FOR THE INDEXES AND BP'S AND P&F INDICATORS...ALL ARE HOLDING SOME S HERE...THIS WEEK WILL BE CRITICAL...LIKE THEY ALL ARE...PLEASE TRADE SMART...USE STOPS, AND FOCUS HARD...
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HERE'S THE STOCK WATCH LIST FOR THIS WEEK...NO REAL EARNINGS BIGGIES YET..NEXT WEEK THEY START...
EXPE---WHAT CAN I SAY FOLKS..THIS STOCK IS WONDERFUL TO TRADE..IT'S SO OVERBOUGHT IT'S RIDICULOUS...BUT I KEEP DAYTRADING IT ALMOST EVERYDAY WITHOUT FEAR..I'M NOT FALLING IN LOVE EITHER<G>...55.40 THE BTL---54.25 THE SST...
AMGN---VERY OVERBOUGHT BUT A BEAUTIFUL CHART...59.10 THE BTL---57.95 THE SST...
MRK---I OWN THIS STOCK AT 54.74 AND WILL ADD ON PB'S..I CAN DO THIS<G>...YOU CANNOT...BROKE A SPREAD TRIPLE TOP AT 56...60 IS MY TARGET..I MAY SELL CALLS AGAINST THIS AT SOME POINT...THAT'S HOW YOU RAKE IN CASH EVERY MONTH OR SO...55.85 THE BTL---54.85 THE SST...LEARN HOW TO WRITE/SELL COVERED CALLS.
VAR---VERY NICE CHART BUT SOME TIMES ERRATIC...BROKE OUT OF A LARGE SIDEWAYS DESCENDING WEDGE, AND THAT WAS SOME MOVE UP...BUY ANY SOLID PB HERE FOLKS...NICE STOCK AND SECTOR...DRUG SECTOR IS BULL ALERT...53.35 THE BTL---52.40 THE SST...
KLAC---HOLDING LIKE A ROCK HERE..HIT THE BRL LINE AT 40 AND HAS "NOT" REVERSED DOWN 3 BOXES YET TO 37..AN IDEAL BUY POINT...BUT IT'S CLOSE RIGHT HERE...I'D BUY THAT PB...NICE PB ON LOWER VOL...38.20 THE BTL---37.15 THE SST...
YHOO---POWERFUL TRIO OF INETS WITH YHOO & EBAY STRONG TOO..THE ETF FOR THIS GROUP IS THE HHH...THE HHH IS AT 30 HERE 27 IS THE 3 BOX RV DOWN...IT MAY JUST KEEP GOING UP...24.80 THE BTL---23.90 THE SST...
AMZN---ONE UNREAL MOVE FOR THIS ONCE HATED STOCK...HENRY BLODGETT IS GONE NOW..AND IT'S REALLY GETTING IT'S ACT TOGETHER...I HATE BEZOS LAUGH<G>...HAHAHAHAHAA...25 WOULD BE A SUPER PRICE IF WE CAN GET TO GO LONG...27.65 THE BTL---26.70 THE SST...THIS STOCK IS VERY OVERBOUGHT AND MAY PB AHEAD OF EPS THIS MONTH..COULD BE A GOOD SHORT...WE'LL SEE...
IMCL---THIS STOCK HAS MADE ME A FORTUNE DAYTRADING IT..I THINK IT'S A BETTER LONGER TERM HOLD...HAD A SIDEWAYS PAUSE AT THE TOP OF THE FLAG, AND THEN EXPLODED UP..BROKE THRU THE BRL TOO...17--17.1/2 THE BUY IN AREA I WOULD THINK...18.85 THE BTL---17.90 THE SST...YOU MIGHT WAIT FOR THE PB...
MSFT---RIGHT NEAR HEAVY S HERE AT THE BSL AT 24...IF IT HOLDS WELL MONDAY I WILL TAKE THIS LONG IN A POSITION TYPE TRADE...IT'S HAD A SOLID PB SO FAR...MY STOP WOULD BE 22...IT HAD A NEGATIVE STICK ON FRIDAY A DOJI...25.15 THE BTL---24.15 THE SST...
TEVA---THIS WONDERFUL STOCK HIT THE TOP OF THE 10 WK AT 43 AND IS TRYING TO CORRECT...40 IS THE 3 BOX REVERSAL BACK DOWN...BTW THE TOP OF THE 10 WEEK IS 100% OVERBOUGHT AND USUALLY DUE FOR A PB..AS IS THE BOTTOM OF THE 10 WK AND THAT'S 100% OVERSOLD...42.35 THE BTL---41.25 THE SST
QLGC---IS A HAIR AWAY FROM A 3 BXRVDN AFTER A SOLID RALLY UP...37 IS THAT NUMBER WATCH FOR IT...38.75 THE BTL---37.70 THE SST...
QCOM---I THINK I'VE SAID FOR WEEKS NOW AS QCOM CHOPS AROUND, THAT ANY BREAK OF 40 WOULD BE ONE HECK OF A LONG TRADE.. IT HIT HEAVY O/H R AT 39..IT'S PULLED BACK TO S HERE AT THE 20 & 40 EMA'S DCC...THERE WAS A HAMMER STICK ON FRIDAY..A BULLISH DOJI BAR...36 IS THE 3 BXRVDN...38 THE BTL---36.95 THE SST...
PSFT---WEAK CHART HERE AND MAY GO LOWER IF WE CONTINUE TO PULLBACK..THIS STOCK I WROTE ABOUT AS IT BROKE A TRIPLE BOTTOM AT 17...IT WAS A SHORT ALL RALLY STOCK...ANYONE DO THAT??...16.10 THE BTL---15.15 THE SST...
OVTI---THIS IS A VERY NICE STOCK CHART...BUYERS ON EVERY SINGLE PB...IT JUST REVERSED BACK DOWN 3 BOXES...THERE WAS HEAVY SELLING ON FRIDAY ON THE DCC...SITTING ON THE 20 EMA HERE...21.80 THE BTL---20.75 THE SST..
NVLS---BASING SIDEWAYS FOR DAYS NOW ABOVE TWO AREAS OF S AT THE 20 & 40 EMA'S...DCC CHART...29.55 THE BTL---28.45 THE SST...
MXIM---37 IS THE 3BXRVDN AFTER A HUGH RALLY OFF THE LOWS...STRAIGHT UP TO..IT NEEDS THIS BREATHER...38.40 THE BTL---37.35 THE SST...
IBM---BROKE OUT AT 81 AND TOUCHED 84, IT'S PULLED BACK HERE 3 BOXES...I OWN THIS STOCK LONG AND WILL ADD ON ANY PB...NEGATIVE DOJI STICK ON FRIDAY...COULD PB TO 79...81.25 THE BTL---80.25 THE SST...
PG---THIS STOCK BROKE A LONG STANDING DOWNTRENDLINE AT 86 AND HIT 89...IT'S BASING IN A FLAG PATTERN AT THE HIGHS...86 IS A PERFECT PB ....89.15 THE BTL---88.10 THE SST...
ELX---A NICE DEVELOPING CHART..I AM LONG THIS STOCK AT THE MOMENT..AND THINK IT COULD GO A LOT HIGHER..SAY 26!...ALREADY REVERSED DOWN AT 19 A 3BXRV...BAD STICK ON FRIDAY A DOJI..SO WE'LL SEE...20.05 THE BTL---19.15 THE SST...
LLTC---IN A DESCENDING WEDGE DCC AND TOUCHING THE 20 EMA TOO..PERFECT AREA TO GO LONG...NEEDS TO GET BELOW 32 FOR A GOOD SET UP TO TAKE IT LONG...33.10 THE BTL---31.95 THE SST...IT COULD MOVE A BIT LOWER HERE TOO DEPENDING ON THE MARKET THIS WEEK...BUT BUY THAT DIP...
OK HERE'S THE DRILL...WAIT FOR MONDAY TO TUES TO SEE WHAT THE MARKETS LOOK LIKE..NO GUESSING HERE..I'LL LEAD...ANYTHING CAN HAPPEN HERE BECAUSE OF OUTSIDE INFLUENCES OBVIOUSLY...THE PROBLEM IS WE CANNOT TRADE THAT NOISE...WE CAN ONLY TRADE WHATS IN FRONT OF OUR FACES...LET'S SEE WHERE THIS "LOCAL" BOTTOM OCCURS AND WHERE THE BUYERS STEP BACK UP TO THE PLATE...WE'LL FOLLOW THEM...IF THEY DO NOT SHOW UP AND I'M WRONG ABOUT THIS DIRECTIONAL MOVE THEN NO HARM NO FOUL...
AS POINT & FIGURE TRADERS WE PLAY CABOOSE, WE DO NOT PREDICT, WE DO NOT SPECULATE, WE DO NOT GAMBLE...WE ONLY TRADE THE TREND AS BEST WE CAN...REMEMBER FOLKS...WHAT IS...IS..IGNORE EVERYTHING ELSE...EVERYONE HAS AN OPINION...SO WHAT...IF YOU TRY TO LISTEN TO THE WORLD YOU'LL NEVER PULL THE TRIGGER..YOU'LL BE FROZEN AT THE MOUSE...IT'S TIME TO GET READY...GOOD LUCK TO US ALL...
I AM STARTING MY CLASS TOMORROW AT ABOUT NOON FOR 1 1/2 HOURS EVERY OTHER DAY...I'LL SEE MY STUDENTS IN THE MORNING...
I WILL LEAVE THE PASSWORD AND ADMIN CODE THE SAME FOR THIS WEEK FOR THE REAL TIME TRADING ROOM..the password is....warfactor
HAVE A GREAT EVENING...
BEST REGARDS
JERRY
jerry olson
www.buyitbuyitsellitsellit.com
jerry.olson@verizon.net |
