Here's my newsletter from 2 weeks ago nothing has really changed as yet..but we'll see huh?
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JERRY OLSON'S
"POINT" OF VIEW NEWSLETTER
DATED AUGUST 3RD 2003
SEASONALITY & DOLDRUMS BLAHS
Hello there everybody, hope all is well with you and yours. Well it's raining again here in Philly only this time we have oppressive humidity to knock you over altogether..Good gosh what a spring/summer so far here in the east.
Well here comeS the summer doldrums, slow trading, slower thinking<g>, vacations, low volume, you name it that's where we're headed for sure. The seasonal negative bias is here too..Aug/Sept time frame is usually moving the markets lower after a stellar rally off the March lows. Things can breakdown easier without much effort or volume for that matter. I am not saying this is the end of the rally, we could just continue to move sideways to lower correcting this excessive run up. But to say the least this market looks a bit tired to me. We'll know more this week as some of the main indexes are near the breakdown areas. I have in the past seen the edge of the abyss not broken..They take us there only to rally it up again trapping the shorts and scaring the bulls. We'll know soon enough.
I do not want you to anticipate or try to guess which way this is going to go. It makes no sense to "think" you can outsmart the market. Forget that folks. We'll patiently wait the breakdown or breakout and trade it accordingly. I have written about this event over the last few letters to prepare you if this or that happens..well are you prepared? Do you have a game plan? If so what are you going to do with your mutual funds, your IRA's- 401K's etc. You're all set right? Don't be sitting there like a deer in the headlights if I give the signal to sell it all. It won't be a panic signal as you already can see this market is a slow moving Titanic Ship, it will take a lot to move this lower. In fact as I write this newsletter NONE of my 3 main coaches or indicators on P&F have reversed down. They have hardly budged so far. Well for that matter neither have the indexes. The DJIA-COMPX-SOX-SPX etc are still here at the moment.
Some of these indexes are at critical junctures and could breakdown this week. We could have witnessed a buying climax in the major indexes last week.. A breakout failure. It's very hard to assume thats what we witnessed. The reason is a simple one. We have seen these candlesticks those gravestone doji's before get taken out the very next few sessions with a vengeance. Will it be different this time? Maybe. I'll be giving us the numbers for all to set alerts on and what you should be doing "if" this happens. Look there is no sense in sitting idly by and letting your hard earned money drain away..Stockbrokers did this to the entire investing public for the last 3 1/2 years. Are you going to do it too? Take action when if this happens...Just be on your toes here.
You can move to cash, you can by puts on your entire portfolio using the SPX or OEX, you can buy into the Rydex Tempest Fund that gives you twice the leverage on any move down of the SPX 2 times. You can do a ton of things to "preserve" your principal..At all costs you MUST do this. Lost principle is like a death warrant, your walking to the electric chair...Want to do that? So be ready to take action and be calm and collected.
Let's talk specifically using the OEX the S&P 100 index. If this index breaks down you could buy the Aug or Sept 490 puts, the symbol is OXB-TR(AUG) COST IS $6.00 OR THE OXB-UR(SEPT) COST IS $12.70, These are for people that do not trade the futures. I would use this as a hedge or swing trade if we breakdown. Now if we rally here you can buy the 495 or 500 Calls..You can look any option up on the www.cboe.com site add it to your favorites and use it to monitor your option trades..ON Qcharts if you subscribe to OPRA you'll see these real time. Options give us options. Use them and take profits either at 50% or 100% do not look for homeruns. Not in this volatile market.
I do want to mention that August thru Nov is usually a seasonal weak period for the markets in general. We have the most selloffs during this time frame.. Let's not try to buck this trend. If we begin to roll over here, then we're going to have to change our stripes to bears from bulls. We've had a great run from the March lows folks, and all things have to come to an end. It would not shock me to see a major correction into the fall. It happens almost like clockwork each year beginning at this time. So heads up here. Just giving you something to think about.
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OK LET'S CHECK ALL THE IMPORTANT INDEXES WE WATCH AND MONITOR..PLEASE SET HARD ALERTS THIS WEEK. GET READY FOR ANYTHING. I AM NOT GOING TO CHANGE ANYTHING I'M DOING RIGHT NOW, AS SCALP TRADING HAS BEEN STELLAR FOR ME AND YOU THESE PAST 2 WEEKS. I AM BACK IN RHYTHM AFTER TRADING LIKE A DUNCE FOR 2 WEEKS...IT COST ME SOME MONEY BUT I GOT THAT ALL BACK AND THEN SOME. ALSO I WANT TO EXPRESS TO YOU ALL, THAT I LIKE TO KEEP USING THE SAME STOCKS WE KNOW AND LOVE TO TRADE. IT'S IMPORTANT FOR ALL OF US TO UNDERSTAND SUPPORT AND RESISTANCE AREAS FOR THESE STOCKS. LOOK IT MATTERS NOT WHAT THE NAME OF THE STOCK IS, IT ONLY MATTERS IF IT'S LIQUID AND MOVES ABOUT 10% INTRADAY. STAY IN SCALP MODE AND LIVE TO TRADE ANOTHER DAY. CASH AT NIGHT HERE IS A MUST.
DJIA-DOW-INDU---WHAT'S AMAZING IS THIS INDEX ACTUALLY BROKE OUT LAST WEEK AND THEN PROMPTLY SOLD OFF. A BUYING CLIMAX? A TRAP FOR THE BULLS? ON POINT & FIGURE THE 9350 LEVEL WAS A DOUBLE TOP(DT). SELLERS WERE CERTAINLY THERE FOLKS. IF THIS INDEX CAN CLEAR 9400 IT TAKES THEM ALL OUT. THE CHART STILL LOOKS OK. ON THE DOWNSIDE..A BREAK OF 9000 THEN 8800 WOULD BE NEGATIVE SET ALERTS. THE NYSE BULLISH PERCENT(NYSEBP) THE MAIN COACH, IS AT 75.94%, NOW LOOK AT THIS, AT THE TOP IT HIT 76%. HOW ABOUT THAT. JUST OFF A TOUCH FROM THE ALL TIME HIGHS. CRAZY HUH? IT MEANS THERE HAVE BEEN NO "MAJOR" SELL SIGNALS ON THE NYSE STOCK CHARTS YET. WE ARE SITTING ON AN UPTREND LINE AND THE 20 EMA ON THE DAILY CANDLE CHART( D C C)
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COMPX--NAZ---RALLIED UP TO 1750 LAST WEEK AND THEN SOLD OFF HARD. THERE WAS A PERFECT GRAVESTONE DOJI ON THURSDAY WITH A FOLLOW UP STICK ON FRIDAY ON LOWER VOLUME. IT'S SITTING ON THE 20 EMA DCC. WE STILL HAVE A SOLID RISING TREND LINE TOO AT 1700/1690 AREA. ANY BREAK OF 1670 AND THIS INDEX IS TOAST. NOW A BREAK OF 1760 WOULD RE- REVERSE IT BACK UP AGAIN FOR A SHOT AT 1780 TOP..THINK IT WILL HAPPEN? YOUR GUESS IS AS GOOD AS MINE..NO CLUE!. THE OTC BP IS AT 69.58% DOWN A TOUCH OFF THE TOP AT 70%, AGAIN IT SHOWS THE TECH SECTOR IS STILL STRONG WITHOUT A LOT OF SELLERS "YET".
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SOX---A SURPRISE ON FRIDAY AS IT WAS VERY STRONG. THIS IN THE FACE OF THE BP SEMI IN O'S. BUT LAST WEEK AFTER THIS BP REVERSED DOWN TO 76% THE INDICATOR NOW STANDS AT 78.05% TRYING TO COME BACK "UP" AGAIN..AMAZING HUH?. SO WE NEED TO TAKE OUT 400 FIRST, THERE'S A TRIPLE TOP AT 405 THAT WILL BE HEAVY O/H R(RESISTANCE) AND THEN 415 THE B/O BUY AREA. ON THE DOWN SIDE..ANY BREAK BELOW 370 AND THIS INDEX AND MARKET IS HEADING MUCH MUCH LOWER. THE INDEX HAS EXCELLENT S(SUPPORT) AT THE BSL LINE THE BULLISH SUPPORT LINE AT 380. WHICH BTW IS THE MIDDLE OF THE 10 WEEK TRADING BAND.
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NDX-QQQ'S---THIS ONE WAS WILD, WE BROKE A DT LAST WEEK AT 1290-1300, SOLD OFF LIKE ALL THE OTHER INDEXES AND STOPPED AT THE 20 EMA ON THE DCC. NOW ANY BREAK OF 1240 THE TRIPLE BOTTOM AREA AT 1230 AND THATS ALL SHE WROTE FOR THIS ONE. YOU WOULD SHORT THE QQQ'S HARD THERE FOR A SWING OR POSITION TYPE TRADE. THAT WOULD ACTUALLY BE A NEGATIVE P&F PATTERN KNOWN AS A BULLISH SIGNAL REVERSAL. THE BP IS 75% IN X'S AND HOLDING FOR THE MOMENT..ANY BREAK OF 72% AND IT'S ALL OVER. I HAVE SET ALL THE ALERTS USING P&F FOR THESE BP'S. LOOK FOLKS DO NOT ANTICIPATE WAIT FOR THE SIGNALS.
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BKX---THE BANKING SECTOR COMPLETELY BROKE DOWN LAST WEEK BECAUSE OF RISING INTEREST RATES. IT ALSO MADE A LOWER HIGH ON THE CHART. IT PULLED BACK HERE TO THE MIDDLE OF THE 10 WEEK. 885 IS THE 3 BOX REV UP. LOTS OF S AT 850. ON THE DCC CHART THERE WAS A CLEAR BREAKDOWN OF SUPPORT.
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BTK---IT'S IN A SMALL TRIANGLE NOW. 445 IS THE BREAKDOWN, 470 THE DT. 480 THE B/O BUY SIGNAL. IT'S IN THE MID OF THE 10 WEEK. THE BP BIOM IS AT 67.57% AND STILL IN X'S AS IT POPPED BACK UP OFF THAT 60% AREA. IT'S SITTING ON THE 40 EMA DCC..
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SPX---DO OR DIE AGAIN. FOR 2 MONTHS NOW THIS MAJOR INDEX I FOLLOW HAS MOVED STRAIGHT SIDEWAYS. IT'S IN A RANGE FROM 1010 AT THE TOP TO 980 AT THE BOTTOM..TRULY AMAZING IF YOU ASK ME. 975 IS THE FIRST SIGN A REAL TROUBLE. 960 I AM SHORT AS ALL GET OUT. 930 IS THE RISING BSL LINE FOR A BOUNCE. 995 IS THE 3 BX RV UP. 1010 AWESOME R THERE WITH 1020 THE GIGANTIC B/O..WILL IT DO IT? BTW THE FIBO RETRACE DOWN FROM THE MARCH LOW TO JUNE TOP IS 928--930..RIGHT ON THE NUMBER. THE BP SPX IS AT 76.20% ON THE EDGE OF BREAKING DOWN TOO..ALL IN ALL THIS INDEX IS IN A PRECARIOUS POSITION I WOULD GUESS IT PROBABLY WILL BREAKDOWN.
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OEX---A GOOD TRADABLE ETF. JUST LIKE THE QQQ'S. THE BP IS AT 83% JUST DOWN A NOTCH FROM 84% SO STRONGER THAN EVEN THE SPX. 480 THE BREAKDOWN, 515 THE B/O YOU CAN PLAY THIS EITHER WAY..WAIT FOR CONFIRMATION. TO NOT LEAN HERE.
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VIX---DID A 3 BX RV UP LAST WEEK TO HIT THE DOWNTREND LINE THATS CONTAINED "ALL" RALLIES UP. WILL IT HOLD THIS TIME? YOU TELL ME<VBG>. NOW LOOKING AT THE P&F CHART PATTERN OF THIS INDICATOR, IT HAS COMPLETED A TRIPLE BOTTOM FAILURE PATTERN THAT IS USUALLY "BULLISH" SO I WOULD "ASSUME" THIS WILL IN FACT B/O HERE AT 26...THAT WOULD BE NEGATIVE FOR THE MARKETS GOING FORWARD.
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SPU3---THE FUTURES---AFTER A STELLAR B/O AT 1000 IT SOLD OFF HARD.. A BUYING CLIMAX? IT BROKE A DOUBLE BOTTOM(DB) AT 980 A BULLISH SIGNAL REVERSAL NEGATIVE. ANY BREAK BELOW 972 I WOULD BEGIN TO EXIT ALL LONGS, THEN ON A BREAK OF 960 TAKE IT ALL OFF THE TABLE.
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IN REVIEW: YOU CAN SEE WE ARE AT THE BRINK AGAIN.. THE SPX & THE FUTURES ARE NEARING A BREAKDOWN, WHILE THE VIX IS SETTING UP FOR A POTENTIAL B/O..THAT WOULD PUSH THE MARKETS LOWER IF BOTH HAPPEN TOGETHER..COMPRENDE'?..LET'S WATCH THIS WEEKS ACTION WITH BOTH EYES GLUED TO THE SCREEN.
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NOW ON TO THE STOCKS WE LIKE TO TRADE. SOME VERY INTERESTING SET UPS HERE IF THIS OR THAT HAPPENS...THE MARKET WILL LEAD THESE STOCKS UP OR DOWN FOR DARN SURE.
CCMP---WITHOUT A DOUBT MY BEST TRADES OF THE WEEK..LOVE THE CHART SO FAR. DOUBLE DOJI'S DCC CHART FOLKS SO BE COOL...62.60 THE BTL---61.70 THE SST---
SNDK---ONE OF THE BEST DIP BUYS EVER. CAN IT CONTINUE?...57.00 THE BTL---55.50 THE SST..PLEASE WAIT FOR EITHER TO TRIGGER...
AMZN---40.55 THE BTL---39.45 THE SST--AFTER A SPECTACULAR RUN HERE THIS ONE MAY BE GETTING TIRED. RIGHT NOW JUST A 3 BOXRVDOWN SO FAR.
EBAY---LOOKS AWFUL ON THE DCC CHART IT BROKE THRU THE S AREA AT THE 40 EMA. ON THE P&F CHART IT'S MADE A NORMAL PB TO THE MIDDLE OF THE 10 WEEK HERE..AND MAY BOUNCE IF THE MARKETS STRONG NEXT WEEK...105.90 THE BTL---104.70 THE SST...I LIKE IT FOR A BOUNCE HERE...MARKET WILLING.
IMCL---BROKE OUT SHORT TERM AT 39 AND RAN TO 44, THEN ROLLED OVER AND DOWN MAKING A LOWER HIGH. 39.55 THE BTL---38.45 THE SST...
KLAC---THIS STOCK WILL NOT GO AWAY? WAS VERY STRONG AGAINST THE TREND ON FRIDAY SOMETHING'S UP?
BOUNCED OFF THE 20 EMA DCC. 52.75 THE BTL---51.65 THE SST...I LIKE IT LONG MARKET WILLING.
PCLN--- I REALLY LIKE THIS CHART ESPECIALLY SINCE IT PULLED BACK 4 BOXES. HAD SENSATIONAL EPS. WATCH FOR ANOTHER POP HIGHER HERE. 32.30 THE BTL---31.15 THE SST-
QCOM---CANNOT GET THRU 39 ON VOLUME VERY TOUGH R THERE...SELLERS APPEAR EVERY SINGLE TIME...MAN WHAT AN EXPLOSION WHEN IF IT BREAKS. SITTING IN A TRIANGLE DCC CHART. 37.05 THE BTL---35.95 THE SST..LOOKS GOOD EITHER WAY HERE. THE TRIGGER I MEAN<G>...
QLGC---THIS STOCK HIT A DT AND FAILED TO BREAK OUT, IT THEN GATHERED STEAM TO THE DOWNSIDE AS SELLERS CAME IN WITH A VENGENCE. IT JUST TOUCHED THE BSL LINE ON FRIDAY..WE MAY GET A BOUNCE HERE.
44.10 THE BTL---42.85 THE SST.
MO---THIS STOCK HAS BEEN SIDEWAYS AT LOWER LEVELS SINCE MID JULY..IT GOT A LARGE FAVORABLE RULING ON FRIDAY..IT TRIED TO RALLY AGAINST THE GRAIN..IF THE MARKETS UP THIS WILL MOVE UP AS WELL. IT'S OVERSOLD HERE. 40.90 THE BTL---39.80 THE SST. I AM LONG & UNDERWATER SO FAR.
YHOO---IN A SMALL TRIANGLE NOW ON P&F. 32.00 THE BTL---30.95 THE SST--TAKE EITHER TRIGGER MARKET WILLING SHOULD BE NICE.
SOHU---IN A MAKE IT OR BREAK IT SET UP ON P&F CHART....THE TOP WAS AT 43 WITH A LOWER DT AT 41..THE BOTTOM OF THIS RANGE WAS A DB AT 36 ..RIGHT NOW WE'LL SEE WHICH WAY IT WANTS TO GO. 37.80 THE BTL---36.65 THE SST..ANY BREAK OF 35 THIS STOCK PLUNGES STRAIGHT DOWN...STAY SHORT IF IT HAPPENS.
SINA---DIFFERENT ANIMAL..VERY NICE BULL FLAG PB ON THE DCC CHART ON LOWER VOLUME. STILL WELL ABOVE THE 20 EMA. 34.00 THE BTL---32.85 THE SST- STRONG STOCK AND CHART...
NTAP---IN A SHAKEOUT PATTERN ON P&F EVERYONE..STRONG STOCK IN A GOOD SECTOR STILL..HAMMERED NICELY ON FRIDAY DESPITE THE SELLOFF. 16.65 THE BTL---15.75 THE SST...I LIKE IT FOR A BOUNCE MARKET WILLING.
RIMM---LOTS OF POSITIVE NEWS ON THIS ONE..IT SPIKED UP LIKE A ROCKETSHIP..ACTUALLY HAS DOUBLED IN THE LAST 2 MONTHS. MUST BE DOING SOMETHING RIGHT. GIGANTIC VOLUME FRIDAY...27.85 THE BTL---26.70 THE SST
MERQ---BROKE A TRIPLE TOP AT 42 MADE A 52 WEEK HIGH THEN SOLD OFF STRAIGHT DOWN..A BUYING CLIMAX FOR SURE...IS IT DONE? IT'S IN A DESCENDING WEDGE HERE..MAYBE IT SURPRISES.. COURSE MAYBE NOT<G> 40.45 THE BTL---39.30 THE SST..IF IT BREAKS 37 STAY SHORT...
BRCM---MADE A 52 WEEK HIGH AT 29 THE SOLD OFF LIKE A RUNAWAY TRAIN..ANOTHER BUYING CLIMAX. SITTING AT A DB ON THE 200 EMA DCC. MAYBE WE GET A BOUNCE HERE?...21.70 THE BTL---20.80 THE SST---
JCOM---POWERFUL SOLID CHART..NO SELLERS HERE..LET'S SEE IF WE CAN CATCH THE NEXT BOUNCE UP...54.60 THE BTL---54.45 THE SST..THIS STOCK PROJECTS TO 61 THE 61.8% FIBO..MARKET WILLING...
NVLS---FAILED TO BREAK A DT AT 40..SELLERS SHOWED UP TO PUSH IT LOWER. IT BROKE A DB AT 35 LAST WEEK...SMALL HAMMER FRIDAY...SIDEWAYS ACTION FOR 3-4 WEEKS NOW...36.25 THE BTL---35.20 THE SST...
EXPE---EARNINGS ON THE 5TH OF AUG..IT'S IN A TRIANGLE...IACI WILL BE AFFECTED AS EXPE MOVES UP TO THAT DATE. 77.55 THE BTL---76.25 THE SST...SHOULD BE INTERESTING FOR THIS STOCK THIS WEEK...
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OK THATS IT FOR THIS WEEK...SEEMS I'M SAYING THE SAME THING EACH AND EVERY WEEK..BUT I NEED TO GET IT ACROSS THAT BEING IN A CHANNEL OR TRADING RANGE TAKES PATIENCE..NO NEED TO RUSH IN FRONT OF ANYTHING..WHEN THE REALITY IS, THE MOVE HAS NOT HAPPENED YET. STAY TUNED IT SURE WILL BE FUN...
THE PASSWORD FOR THIS WEEK IS...................beready.......................one word lower case
see you in the room in the am
best regards to you all
jerry
jerry olson
www.buyitbuyitsellitsellit.com
jerry.olson@verizon.net |
