My Newsletter from 2 weeks ago...
==========================================================
JERRY OLSON'S
"POINT" OF VIEW NEWSLETTER
DATED APRIL 20TH 2003
"BULLS ARE ROMPING THE PAMPAS-NYET"
Hi there all my cyber trading buddies...Hope all is well with you and yours...
Boy arent't the markets frisky?..Having fun are we<G>?..Well as you know I sure am...for the last 4-5 weeks we've been pounding the table on the long side...I only hope you took full advantage of the stock selections as well as sector suggestions too...Currently I am long QLGC---BRCM---RMBS---MRK--FRX---BBH---ESRX---GERN---KLIC---STAT---MSFT...I sold JCOM after taking 4.50 points at 36 last week..it was to say the least awesome..trailing up stops at perfect retrace areas and letting my winners run...I am doing the same things with all the others i currently hold...I will not sell anything till the market takes me out..
Why you ask? Because I have NO CLUE as to where this market is going nor do I know how high right now...we are heavily overbought on everything I watch...that simply means to me we can turn down at anytime. But who am I to fight this wonderful trend? Not me folks...I hate to guess, or speculate...it's so dumb...So I set stops and let the market take me out whenever it chooses to do so...It would behoove you to do just the same thing on either side of the trades, long or short...Try not to predict, or to out think the market, it's senseless folks...Just use your head and let em' roll with the flow...
Ok so where are we?..Well the market is really chugging along here, overbought and all...There are not a lot of sellers out there yet so I think we'll continue up for the early part of this week, and then begin to correct this 1st nice run off the March 11th lows...where do I see us going? Well all things being equal, and the markets usually are orderly..845 SPX would be a good guess from where ever we top out soon...In fact any retrace back down off the current potential top will not test the March lows...we'll probably make a higher low on this coming pullback...and then have a solid summer rally into early July...I can see this clearly, but things change the dynamics of the charts, so I always hesitate to speculate...
Be that as it may...like I said I have no clue where the top will be or the pullback will end and new buyers will step up to the plate. Right now the bulls are rampaging on the Pampas like scared deer, but I hate it when everyone is so bullish, so NYET to that folks...it usually means the top is nearer to our hearts than farther away...Get ready for this correction...It will not be too bad to trade...I want to discuss what you should be doing during this pullback whenever it starts...
Let's take an example of XYZ stock...you purchased it at 40 it's now 50...A). you could just simply hold it...not my choice...B. You could just simply sell it...not too shabby...C). you could write a Covered Call against your shares, for example using 1000 shares..You have the privilege to write 10 contracts against your shares, 1 contract equals 100 shares of stock...so 1000=10 contracts. So what I would do is sell the deep IN THE MONEY CALLS at the 45 strike...why do this instead of the 50's or 55's.??? I'll tell you why...If we're right and we pullback nicely, then your ITM Calls will reap you a large amount of money right away...You'll immediately get $5.00 bucks for the CC at the 45 strike since their ITM & the stocks at 50, and then you'll get paid the premium on top of those calls for say May...let use $2.00 more..that brings in $7000.00 dollars asap...and of course you "could" write the 50's or 55's too for the premium only...
Now let's assume you did it my way...1. By options expiration date the 3rd Friday in May the 16th if the stocks below 45 you get to keep the stock and the $7000.00...2. If the stocks above 45, say it stays right at 50, they will exercise and take your stock, pay you $45,000, you paid $40,000 and you get $7000.00 + $45,000 more total $52,000..no harm no foul...still a nice profit...C). the stock falls below 40 during the selloff...well folks that's life...you are still protected for 7 full points down from 45..or 38...the stocks currently at 50...if it sold off down to 38 you would be breakeven completely and still own the 1000 shares...and let me tell you that's a big hit on that stock about 22-23%..
What you're trying to do is leverage your shares without giving them up if you feel 40 was a solid cheap entry, if not then sell that stock out right using trailing stops.....So this lays out as a perfect scenario if you choose to do it...
================================================================================================
OK LET'S CHECK THE INDICATORS AND INDEXES...BTW...IT'S MY BIRTHDAY ON THE 23RD THIS WEEK...LOOKOUT BELOW<VBG>...HAPPENED ONCE BEFORE IN 2000..NOT A PRETTY SITE...
DJIA---PERFECT LOOKING TRIANGLE HERE ON P&F...WATCH 8450 AS THE BUY SIGNAL LONG WITH O/H R AT 8500 RIGHT HERE AS A TRIPLE TOP. IF WE CAN TAKE OUT 8550 THEN 880 IS DOABLE VERY FAST...AND THAT BREAK OR 8550 CONFIRMS THE BREAK OF THE TRIANGLE...8100 IS THE MOVE LOWER AND I WOULD WATCH FOR THAT TOO...7950 IS 1ST SUPPORT...CHARTS VERY NICE HERE FOLKS...
NYSE BULLISH PERCENT IS IN X'S AND MOVING UP AT 46.66% SOLID FIELD POSITION..WHILE I FULL EXPECT A CORRECTION, I DO NOT THINK THIS INDEX WILL REVERSE BACK DOWN DURING THAT CORRECTION...YES THE SHORT TERM INDICATORS WILL FOR SURE..BUT NOT THIS ONE OR THE OTHER 2 BIG BOYS THE OTC & OPTI BP'S...
COMPX---RIGHT AT HEAVY R HERE AT 1420/25/30..WE MUST TAKE OUT 1440 TO KEEP THIS INDEX IN THE CURRENT TREND UP...1460 WOULD BE MY NEXT TARGET...WATCH FOR 1390 AS THE 3 BOX REVERSAL BACK DOWN(3BXRVDN)...NOW IF WE BREAK 1330 AT ANYTIME THEN 1260 WOULD BE A NORMAL TARGET...
SOX---BROKE A DT(DOUBLE TOP) AT 330 LAST WEEK LOOKS GREAT. IT'S IN A CUP FORMATION ON THE DAILY AND COULD B/O HERE THIS WEEK...TOUCHING THE 200 EMA DAILY CANDLE CHART(DCC)...BEEN THERE BEFORE TOO...340 IS ANOTHER DT BUY SIGNAL...320 THE 3BXRVDN...BP SEMI IS AT BETWEEN 42-44% IN X'S AND HOLDING FOR NOW...46 KEEPS IT GOING UP, 38% REVRS DOWN...
NDX---IN A PERFECT CHANNEL HERE FOR AWHILE...1020 THE SOLID LOWS AND SUPPORT...1010 WOULD BE A SERIOUS BREAKDOWN THERE...1090 IS THE TRIPLE TOP WITH 1100 AND 1110 LARGE BREAKOUTS(B/0) THERE..TARGET 1160-70 AREA...THERE WAS A LARGE BULLISH ENGULFING BAR ON FRIDAY...THE RS(RELATIVE STRENGTH) FOR THIS INDEX HAS REVD UP..BPNDX IS AT 59% USUALLY TOPS OUT AT 70% TO78%...
BKX---3 CONSECUTIVE BUY SIGNALS ON P&F...LAST ONE WAS AT 770...800 IS THE TARGET...760 THE 3 BXRVDN..VERY PRETTY CHART FOLKS...RS HAS REV UP TOO..SOLID...FINANCIALS LOOK GOOD..
BTK---STILL THE LAGGARD IN THE WHOLE GROUP I WATCH...340 IS THE 3BXRVUP---BROKE A DESCENDING WEDGE LAST WEEK TO THE UP SIDE...BP BIOM HAS FINALLY REVERSED BACK UP HERE FROM BELOW 30%..THIS IS VERY BULLISH TO ME FOR THIS SECTOR GOING FORWARD..ON THE COMING PB, I'LL SET UP A SOLID LIST OF STOCKS TO BUY ON THE NEXT BEST MOVE UP AFTER WE PULLBACK(PB)...
SPX---HIGHER LOWS HERE EVERYONE WITH QUICKER TURN TIMES ON EACH REVERSAL BACK DOWN..THIS IS VERY BULLISH...895 THE BOXRVUP---900 THE DT AND R---905 THE B/O BUY SIGNAL---935 THE TARGET...THE INDEX BP IS ONLY AT 48% PERFECT FIELD POSITION..875 IS MOVING LOWER...
VIX---BROKE A SPREAD TRIPLE BOTTOM AT 26 THIS PAST WEEK AND THEN PRINTED 25 FOR CONFIRMATION...THE BOTTOM OF THE 10 WEEK TRADING BAND IS AT 23...WE SHOULD SEE THAT THIS WEEK...20 WOULD PUT THIS INDEX 110% OVERSOLD AND DUE FOR A LARGE BOUNCE...WATCH FOR 28 AS THE 3 BOX REVERSAL BACK UP FROM RIGHT HERE...30 IS THE 50% RETRACE BACK UP..33/34 HEAVY SERIOUS O/H R(RESISTANCE)...
VXN--SAME EXACT SCENARIO IN A PROTRACTED DOWN TREND...34 VERY OVERSOLD..30 IS POSSIBLE...THEN WE SHALL SEE HUH?
SPM3---THE SPOOOS---FUTURES---NEEDS TO MOVE UP HERE ASAP AT 896...ANOTHER HIGHER LOW...904 IS THE DT--WITH 908 THE BIG TIME B/O---932 IS THAT TARGET HERE...876 KEEPS IT IN O'S AND MOVING LOWER...SET ALERTS...
NQM3--THE NQ'S FUTURES HAS THE EXACT SAME NUMBERS AS THE NDX..NO DIFFERENT, SO RE READ ABOVE...
==============================================================================================
P&F SHORT TERM INDICATORS ARE GETTING OVER BOUGHT HERE..
THE NYSE 10 WEEK IS AT 76.38% IT TOPS OUT USUALLY RIGHT HERE SO CAUTION IS BREWING AS I SPEAK...70% WOULD BE THE 3BXRVDN...
NYSE HI LO INDEX...AT 78% USUALLY TOPS OUT AT 85-90% WATCHING FOR 72% A CHANGE OF TREND...
I LIKE TO HAVE "BOTH" THE 10 WEEK AND THE HI LO REVERSE DOWN TOGETHER OTHERWISE I IGNORE THE SINGLE MOVE...
OTC HI LO INDEX AT 73.60% TOPS OUT AT 78-84% SO IT HAS ROOM TO RUN STILL...66% THE 3BXREV DOWN...
ALL IN ALL WE ARE OVERBOUGHT ABOVE 70% ON ALL OF THE ABOVE...BE COOL OUT THERE AND DO "NOT" CHASE STOCKS UP HERE..THAT'S A NO NO...WAIT FOR SOLID PB'S TO GET LONG...
===============================================================================================
OK LET'S CHECK OUT ALL THE STOCKS WE KNOW AND LOVE...
QLGC---I AM LONG THIS STOCK AT 39.40 AND WAS NEVER STOPPED OUT...I'M HOLDING TILL THEY TORTURE ME<g>..IT BROKE A TRIPLE TOP ON FRIDAY AT 41..OOH THIS LOOKS GOOD FOLKS...42.00 THE BTL---40.90 THE SST...TARGET 44/45 MARKET WILLING...
BRCM---WAS IN A TRIANGLE LAST WEEK AND SIMPLY EXPLODED ABOVE THE DOWNTRENDLINE A GIGANTIC VOLUME..I AM LONG AT 14.46 AND WILL TRY TO HOLD FOR 17.50 THE BRL LINE ON P&F...17.00 THE BTL---16.15 THE SST---
FRX---I AM LONG THIS ONE AT 54.34 SO UNDERWATER..IT HELD THE HARD DOUBLE BOTTOM AT 51 AND NEEDS A PRINT OF 54 TO REVERSE BACK UP HERE...HAS EARNINGS PRE MARKET ON TUES..WE MAY CATCH A RUN HERE FINGERS X'D...LOVE THE CHART AND THE PB...53.80 THE BTL---52.80 THE SST--MUST CLEAR 54 WITH VOLUME...
MRK---I OWN 2 LOTS OF MRK AT 56.00 EPS TOMORROW BEFORE THE BELL...IT'S ALREADY REVERSED DOWN 3 BOXES...NICE HAMMER FRIDAY AND THE "POTENTIAL" OF A 3 STICK PATTERN I LIKE TO TRADE...56.50 THE BTL---55.40 THE SST---THE BTL IS JUST ABOVE THE TOP OF THAT HAMMER..AND IF IT HITS, STAY LONG AND WAIT FOR THE BREAKOUT OVER 57.25 AS A CONTINUATION PLAY...
JCOM---EARNINGS AH MON..WHAT A STOCK..I MAY TRADE THIS LONG AT SOME POINT MONDAY..WE'LL SEE...THIS STOCK HAS NOT EVEN REVERSED DOWN YET...LOOKOUT IF IT MISSES HERE...PLUNGE CITY...35.00 THE BTL---33.90 THE SST---
ESRX---I AM LONG THIS STOCK AT 55.71...EPS ON WEDS AH...I MAY DUMP IT ON TUES...I DO NOT LIKE TO HOLD THRU EARNINGS...VERY DANGEROUS FOR YOUR HEALTH...55.65 THE BTL---54.55 THE SST---
KLAC---THIS STOCK IS GETTING READY TO EXPLODE...I'LL BE IN IT FOR SURE MARKET WILLING..HAS EPS WED AH...CAN WE GET A 2 DAY POP AND GO???...SITTING RIGHT AT A TRIPLE TOP LIKE QLGC..OH HOW SWEET IT IS<VBG>...40.45 THE BTL---39.40 THE SST---I'LL TAKE THIS LONG...
MERQ---JUST AN AMAZING STOCK MOVE INTRADAY AND AFTER HOURS...ONE WILD RIDE...35.40 THE BTL---34.40 THE SST..I LIKE IT LONG HERE...THE SELLOFF AH LAST WEEK WAS MET WITH HUGH AMOUNTS OF BUYING...
RMBS---I AM LONG THIS STOCK AT 15.25..IT'S HAD A SOLID PB HERE...IF IT CANNOT GET ABOVE MY BUY PRICE BY LATE TUES OR EARLY WEDS I AM GONE...15.00 THE BTL---14.20 THE SST...
EBAY---ANOTHER KILLER FOR THE SHORTS..PEOPLE STILL ARE TRYING TO HIT THIS STOCK..YEAH IT'S GOING TO COME DOWN...WHEN? NO CLUE? YOU?....IN A FLAG FORMATION AHEAD OF EPS ON WEDS AH...90.75 THE BTL---89.65 THE SST...
ELX---SOLID CHART AHEAD OF EPS ON THURS...BROKE A DT AT 22 AND SHOULD MOVE UP HERE TOWARD MY TARGET OF 26...23.50 THE BTL---22.50 THE SST---I LIKE IT LONG...
AMGN---INCREDIBLE WONDERFUL CHART PATTERN HERE FOR THIS BIG GUY BIO TECH...SO FAR THEY COULD NOT BREAK IT DOWN...60.60 THE BTL---59.60 THE SST...
ASKJ---REALLY ROLLIN FROM WAAAAY DOWN THERE AT $1.00 THE LAST 2-3 MONTHS..AT THE TOP OF THE 10 WEEK HERE SO BE CAREFUL..EPS TUES AH...9.40 THE BTL---8.80 THE SST...
CKFR---VERY PRETTY CHART HERE FOLKS, MAKING HIGHER HIGHS AND HIGHER LOWS...IN A GOOD SECTOR FINANCE AND THE BKX IS ROCKIN TOO..EPS TUES AH...24.20 THE BTL---23.35 THE SST...
QCOM---HAVING A VERY TOUGH TIME MOVING UP HERE...EITHER IT'S GOING TO SURPRISE BIG..OR IT'S IN DEEP TROUBLE WHEN IT REPORTS WED AH...CHART SAYS NOT GOOD...33.40 THE BTL---32.50 THE SST...
AMZN---REPORTS AH ON WEDS...YHOO KILLED IT FOLKS WITH A FABULOUS REPORT..THE DCC CHART IS ROLLING OVER FOR THIS ONE..SO WE'LL SEE...25.40 THE BTL---24.50 THE SST...I LIKE IT UP HERE...P&F CHART IS OK...EBAY REPORT MAY HELP IT TOO...NICE...
VRSN---EARNINGS AH ON WEDS...TRYING TO BREAKOUT HERE AHEAD OF THAT DATE...11.00 IS HEAVY O/H R AT THE TRIPLE TOP..SO 11.50 IS THE KEY THERE...10.60 THE BTL---9.95 THE SST---
KSS---HEADSUP HERE FOLKS..THIS STOCK IS GETTING READY FOR A LARGE BREAKOUT HERE..REMEMBER I HAD IT LONG AT 56.05 AND MADE 2+ BUCKS ON THE FIRST TRADE...THE P&F CHART IS AWESOME...60.40 THE BTL---59.40 THE SST...I'LL TAKE IT LONG AND THEN WAIT FOR A CONTINUATION SIGNAL AT 61...A BIG B/O AREA...
YHOO---A MONSTER PERIOD...EVERYONE IS TRYING TO BASH THIS STOCK...THE CHART IS TELLING THEM FAGGETTABOUTIT...25.40 THE BTL---24.50 THE SST...UNREAL RS HERE FOLKS...
MSFT---I AM LONG A TRADING LOT AT 25.55...I NEVER SELL MY CORE HOLDINGS OF MSFT...JUST WRITE CC'S ON THEM ALL THE TIME...25.90 THE BTL---24.90 THE SST---
==============================================================================================
OK FOLKS HOPE YOU ALL HAD A NICE EASTER AND PASSOVER HOLIDAY AND WISH YOU AND YOURS ALL THE BEST GOING FORWARD...PLEASE RELAX...DO NOT CHASE WAY UP HERE...WE ARE STILL LONG AND HOLDING..I'LL CHANGE MY COURSE OF ACTION WHEN AND IF THE SHORT TERM INDICATORS MAKE ME DO IT..AND NOT UNTIL THEN..
LET'S ALL HAVE A GREAT WEEK..BECAUSE THE LAST 4-5 WEEKS HAVE BEEN AWESOME..AND ALL MY LONGS SEEM TO BE OK HERE TOO..
SEE YOU IN THE ROOM
BEST REGARDS
JERRY
jerry olson
www.buyitbuyitsellitsellit.com
jerry.olson@verizon.net |
