hit the nail on the head after warning the week before...
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JERRY OLSON'S
"POINT" OF VIEW NEWSLETTER
DATED 16TH NOV 2003
"POSSIBLE SWIFT BREAKDOWN COMING"
Hello out there all my trading friends. I've been severely under the weather with my gums since last week I'm heading back to the dentist Monday early as I'm all blown up and in pain. I doubt i'll be useful in the room, and I'm hoping George Ari Mish Barb and Old Guy will help with the rooms work. This is an import juncture in the markets and the charts.
After looking at all the indexs especially the 2 futures charts we watch daily I am thinking here we have not completed my "Pullback" call from last weeks letter. There are some significant numbers that "IF" broken will lead to very HARD selling with great swiftness to the down side. Be ready and be prepared on those breaks. Do not hesitate to short those stocks and indexes we follow as they will all move down together. This is Options Expiration week too, so as to add to the volatility. I suggest to you all if you use my support numbers along with George's Forks and we reach them this week at anytime as we move lower, you could place some very low number "buy stops" on stocks or indexes you wish to take long on that support area. There is always a chance to get those shares at bargain basement prices this week based on what I see.
I want to remind you all that the last 2 pullbacks using the COMPX as an example were of 120 point durations. Well the top for the COMPX here has been just 8 points shy of 2000. Let's call it 1995 for arguments sake. 120 off that is 1875 exactly a 3 box reversal back down on the P&F default chart using 25 points per box. So the question is this. Will this be the same level again, lower or higher? Meaning really if the market is this strong can they turn it at a higher low? This will be very important in the scheme of things to determine the health of the market going forward and where the Fund Managers mind sets are heading into Jan 2004. Remember this we are late here in the pullback scenario but well overdue for a correction, however this should be over soon and then seasonality kicks in with a bang heading into another earnings season and the January effect too boot.
It's crucially important to be in front of the very next move up here. I think that move will be something to behold at least for the 4-6 months into 1st quarter of 2004. If we're positioned smart we can catch that move just like off the March lows. There's a ton of sideline cash "still" looking for a home, and if we get a nice pullback for this set up to occur and we're in front of the train, then when those dollars are put to good use in the markets we'll reap the benefits big time. I'm taking about swing trades or position trades that we do not sell we only trail up loose stops on the longs. If you did not participate with us from the March lows thru Nov, then this will be the ideal time to get ready.
How do you do this? Sell all your dogs with fleas you've been holding on to for years that have NOT participated in this last rally. Look if a stock you own is dead money then lose it and raise cash to use that money elsewhere why sit on a dead stock. Then as we begin to move higher "after" we see the turning point off this pullback/correction you'll be able to identify those stocks as I write about them in the newsletter to buy and hold using stops. I would dearly love to see the SMH reverse down and pullback to more normal levels so we can get long that ETF. The 38.2% retrenchment back down off the August lows to the Nov highs is at 39 bucks. Guess what folks the "Middle of the 10 week trading Band" is at?, yup 39 bucks. Thats a 5 box(5 points) retrace back down if it's going to happen it's going to happen right now. You know my warnings, "If they cannot take it down", then they'll take it up! What I mean is this. There is nothing written in stone that 39 is the downside target, the 3 box reversal is at 41 and that could be it. I think we'll see that this week. So not to belabor this point if we touch 41 and buyers step up to the plate then we go long with tight stops. Simple as that. You'll be able to use options to trade this ETF. I remind you all INTC-TXN-AMAT are 50% of the whole index, so goes those stocks so goes the index. Set it up to watch those stocks daily. I love the semis going forward.
Ok for another dividend play for the members..I want to thank so many of you that are interested in these trades that sent me so much "important " information on these stocks. Most of these will be S&P 500 index companies. Here's one I like a lot for the chart pattern and yield. AEP corp it's a Utility Corp, but you must do you're OWN DD on this company as I'm doing the TA only.
Let's look at it from a purely technical picture. 1st it pays a 5.20% dividend, 2nd it does trade options, and LEAPs. It's about to break a double bottom at 26 and move toward the Bullish Support Line at 23 or 24 area. If you buy it there say 1000 shares then sell the Jan 2005 LEAP Calls strike 25's. You already know the 3 potential situations. If your stock gets called away you get to keep the premium on the sale of the Leaps, get the dividend for as long as you own it, and also pick up what ever the difference of what the price is at options expiration Jan 2005. If the stock is above 25 then they pay you $25,000, if you paid 23 for the stock you make another $2000.00, but those leaps will be about 3.00 bucks with the stock at 23ish...Very nice safe play..but you need to check the company out top to bottom. FA wise.
Next is DUK Energy. The stock is priced at 17.45 and pays a whopping 6.20% dividend on your investment. It trades Leaps too. So you buy a 1000 shares looking for a pullback toward a possible 15.50 to 16.00 buck area to own it and then sell or write(same thing) the Jan 2005 17.50 calls. The stock has good S(support) at the BSL Line at 15.00 and the 3 year low is at 12.50. So it moves slowly but you care less what it does, 20 is the current top of the 10 week. You're looking for a small pullback to buy it and then wait for a small rally to sell the calls..We'll watch it together. Look just the 6.20% dividend isn't too bad<g>
Ok you understand these trades are for longer term IRA's SEP's and stock portfolio's, they take in cash to bolster losses from the last 3 years. They work and are very conservative. I'll have some others that are more aggressive but for shorter term traders too. Please send me those gold stocks that pay good dividends. Ok let's check out all the indexes..
I HAVE CHECKED AND RECHECKED ALL THE INDEXES ESPECIALLY THE 2 FUTURES WE WATCH FOR DIRECTION. IF THEY BREAK DOWN WE ARE GOING TO MOVE VERY QUICKLY LOWER ON HIGH VOLUME AS THE STREET WILL GET SCARED. THAT WOULD BE COOL, THAT WOULD BE NICE, WE NEED SOME FEAR OUT THERE TO MAKE PEOPLE NERVOUS.
DJIA---JUST DID A 3 BOX REVERSAL BACK DOWN AT 9750 IT HAS "MORE" TO GO I LIKE THE MIDDLE OF THE 10 WEEK AT 9600 1ST TARGET. 9500 IS THE DB AND 9450 IS THE DB BREAKDOWN. IF WE TAKE OUT 9450 WE HEAD RIGHT DOWN TO 9250 A TRIPLE BOTTOM SUPPORT AREA WITH THE BSL LINE RIGHT THERE TOO.. WE'LL BUY THAT IMPORTANT DIP FOR SURE "IF" IT GETS THERE SOON AS THIS PULLBACK IS RUNNING OUT OF A SOLID TIME FRAME FOR IT TO HAPPEN. NOW IF SOMETHING HAPPENS ON THE "OTHER" SIDE OF THE STREET 9900 IS THE DT WITH 9950 THE 52 WEEK BREAKOUT BUY AREA AND 10,400 STILL MY UPSIDE TARGET. I WAS LOOKING AT THE HAMMER LOW IN OCT IT'S AT 9500 THE SEPT LOWS ARE AT "BINGO" 9250, NOT SURE WE GET THERE THOUGH WE'LL SEE HOW IT PLAYS OUT. THE NYSE BP IS IN X'S AND AT 81.69% STILL VERY STRONG.
COMPX---MADE A LOWER HIGH LAST WEEK AT 1970 DID A 3 BOX DOWN AT 1930, A BREAK OF 1920 WOULD BE THE "2ND" SELL SIGNAL ON P&F AND THAT WOULD BE NEGATIVE. IN AN UPTREND ON ANY CHART STOCK OR INDEX WE P&FER'S ALWAYS "IGNORE THE 1ST SELL SIGNAL" BUT NOT THE SECOND ONE. 1900 THE MID OF THE 10 WEEK, 1850 WAS THE LAST LARGE SELLOFF AREA. 1880 IS THE 61.8% RETRENCHMENT BACK DOWN OCT LOW TO NOV TOP. I DO NOT LIKE THE "LOOK" OF THIS CHART. HOWEVER THE OTC BP IS AT 71.42% IS IN X'S 68% WOULD REVERSE IT BACK DOWN. LIKE I SAID BEFORE THE LAST 2 SELL OFFS IN THIS INDEX WAS 120 POINTS EACH SO 1870 IS THE POSSIBLE TARGET.
SOX---LOOKS READY TO BREAKDOWN HERE AT 505 A DB SELL SIGNAL. I LOOK FOR 1ST S AT 490 WITH 470 THE NORMAL MIDDLE OF THE 10 WEEK TRADING BAND. THATS THE 38.2% RETRACE BACK DOWN OFF THE AUGUST LOWS. I'D BUY THAT DIP HARD AT 470 "IF" IT GETS THERE. THE BP SEMI IS AT 80.32% IN X'S AND SOLID. NOW SOMETHING FOR US TO CONTEMPLATE IS IF THE INDEX DOES SELLOFF WE WANT TO "SEE" WHERE THE BUYERS COME IN AT AND THEN GO LONG AND STRONG. THIS INDEX HAS HAD 2 OTHER SHAKEOUT PATTERNS THAT WERE VERY BULLISH AND WE'RE "STILL IN AN UPTREND".
BKX---TOPPED OUT AT 955 WITH A FABULOUS CHART PATTERN AND IT'S JUST NOW PULLING BACK NORMALLY SO FAR. THE 20 EMA IS AT 935, 920 IS THE DB BREAKDOWN, WITH 910/915 MIDDLE OF THE 10 WEEK, THIS COULD RESULT IN A SHAKEOUT PATTERN TO TAKE IT LONG. 950 IS THE 3 BOX REVERSAL BACK UP, BTW THE 38.2% RETRACE BACK DOWN HERE AUG LOWS TO NOV HIGHS IS AT 917.00 A PERFECT AREA TO GO LONG "IF" IT GETS THERE.
BTK---IN THE SAME TRIANGLE BUT LOOKS EVEN WEAKER HERE THAN A WEEK OR 2 AGO. A BREAK OF 420 IS NEGATIVE. THE BOTTOM HERE OF THE 10 WEEK IS AT 410 RIGHT NEAR THE BSL LINE AND GOOD S THERE. I THINK IT'S GOING LOWER I WOULD AVOID BEING LONG BIO'S INSTEAD THEY ARE SHORTS.. THE BBH COULD BE AN EXCELLENT WAY TO PLAY THIS. THE DEC 125 PUTS WOULD BE BEST ESP IF IT BREAKS 120 THATS A BAD BREAKDOWN FOR THIS INDEX. THE BP BIOM IS WEAKER THAN LAST WEEK AND WILL BREAKDOWN AGAIN AT 54% ALL THE MORE REASON TO SHORT THE BIO'S IN GENERAL. THE BBH-XE IS THE DEC 125 PUTS FOR THE BBH COST ABOUT $3.00 BUCKS I LOVE IT...TRY IT FOR A SWING TRADE.
NDX---LOOKS VERY WEAK TO ME HERE. HIT THE BRL LINE ABOVE TWICE AND FAILED THERE ONCE AT 1450 AND THEN AT 1440 REVERSED DOWN HERE 3 BOXES AT 1410...1400 IS NOT GOOD FOLKS FOR LONGS, 1390 THE MID OF THE 10 WEEK WITH THE 38.2% RETRACE BACK DOWN AUG LOW TO NOV HIGH AT 1357 THATS VERY NEAR THE OCT LOW HAMMER. SOLID SUPPORT THERE EVERYWHERE. THE BP NDX IS AT 72% REMEMBER I MENTIONED IT BEFORE 66% IS NEXT STOP AND VERY NEGATIVE FOR THE WHOLE INDEX.
SPX---TOPPED OUT AT 1060+ ON FRIDAY AND CLOSED AT THE LOWS OF THE DAY A BUYING CLIMAX? SITTING AT THE 20 EMA HERE WITH 1030 THE NORMAL 3 BOX REVERSAL BACK DOWN, 1010 IS THE DB BREAKDOWN AND THE "START" OF THAT "SHAKEOUT" PATTERN AS THIS INDEX HAS NEVER GIVEN A SELL SIGNAL. THE 38.2% RETRACE DOWN FROM THE AUG LOW TO THE NOV TOP IS AT 1023. THIS INDEX IS VERY STRONG.. THE BP SPX IS AT 81% IN X'S AND HOLDING.
SPZ3---SAME THING HERE FOR THE ALL IMPORTANT FUTURES...BUYING CLIMAX ON FRIDAY AND ALL OF LAST WEEK. IT'S SITTING ON THE 20 EMA HERE BUT A BREAK OF 1040 THE TRIPLE BOTTOM IS REAL NEGATIVE AND SHOULD START A CASCADE LOWER WITH HIGHER VOLUME AND QUICK PLUNGES. 1032 MID 10 WEEK, 1022 38.2% AUG LOW TO NOV TOP. I AM VERY CAUTIOUS LONG HERE FOLKS. ON ALMOST ALL INDEX CHARTS THERE ARE "UPTRENDLINES" YOU ALL CAN DRAW TO SHOW SOME SUPPORT AT THESE LOWER AREAS OF THE LINES FOR THIS INDEX IT'S AT AROUND 1030-35, YOU CAN DRAW IT FROM THE AUG LOWS THRU THE SEPT LOWS AND THE OCT LOWS TO GET THE PICTURE..
WHAT I CAN SAY IS THO, ALL THESE INDEXES ARE IN PENNANT PATTERNS ON THE DAILY CANDLE STICK CHARTS AND UNLESS AND UNTIL THEY BREAK LOWER THEY ARE ALL BULLISH. WE'LL SEE IF EACH INDEX TOUCHES THE LOWER LINES AND BOUNCE OR JUST FALLS HARD THRU THEM. JUST REMEMBER THIS 1064 IS NOW GOING TO BE A QUADRUPLE TOP BREAKOUT AND A BIG ONE..IT WILL COME AT SOME POINT IN THE NOT TO DISTANT FUTURE.
NQZ3---1400 IS THE NASTY BREAKDOWN BUT THE 1ST SELL SIGNAL IN AN UPTREND. WE PREFER TO IGNORE IT AND WAIT FOR THE REVERSAL OF 3 BOXES BACK UP TO BUY IT LONG. I'D LIKE US TO BE PREPARED TO "BUY THE DIP" AT THE MID 10 WEEK AT 1390 OR AROUND 1360 AREA THE 38.2% AUG LOWS TO NOV HIGHS. THE NQ;S MOVE VERY FAST BE ON YOUR TOES HERE WATCH FOR A BREAKDOWN HARD, THEN A PLUNGE, THEN AN OUTSIDE REVERSAL DAY TO BUY IT THEN AND THERE.
SHOULD BE A FUN WEEK THIS WEEK WITH OP EX OVER BY FRIDAY.
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OK THIS WILL BE OUR WATCH LIST FOR THIS WEEK. MOST OF THESE STOCKS ARE THE ONES WE ARE LEARNING THEIR RESPECTIVE SUPPORT AND RESISTANCE AREAS TO TRADE THEM. USE YOUR HEAD MORE THAN 20 IS WAY TOO MUCH.
AKAM---STORY STOCK LAST WEEK WAS ON FIRE...OK WELL IT DOJI'D AT THE TOP ON FRIDAY WITH A "NEGATIVE" DIVERGENCE ON THE DAILY CANDLE CHART AND A VERY HIGH ADX READING..COULD BE A GREAT 1-2 POINT SHORT...11.35 THE BTL---1065 THE SST---I LIKE IT SHORT BUT WATCH FOR NEWS.
CYMI---HAD A BUYING CLIMAX FRIDAY AND HAS VERY TOUGH R AT 49 THE TRIPLE TOP AREA. LOTS OF DOJI'S THERE...47.00 THE BTL---45.70 THE SST...I LIKE IT SHORT IF IT TRIGGERS TAKE IT MARKET MOVING WITH YOU.
YHOO---ONE FABULOUS CHART FOLKS AS THIS CORRECTS WE WANT TO OWN THIS FOR NEXT YEAR FOR SURE. VERY LITTLE SELLING SO FAR. 42.25 THE BTL---41.10 THE SST.
SINA---CERTAIN DEATH ON THE DCC CHART I CALLED IT SHORT AT 39, AS WELL AS THE P&F CHART TOO..IT LOOKS VERY BAD HERE. 35.00 THE BTL---33.85 THE SST...IF IT CONTINUES TO FALL THE DOWNSIDE TARGET IS 27...ANY 3 BOX REVERSAL BACK UP IS A SHORT..THATS ABOUT 38.
SLAB---I GOT A HUGH SAVE THERE COVERED A BIT EARLY BUT I'M HAPPY. NOW IT LOOKS LIKE REAL TROUBLE FOR THIS STOCK...IN A REVERSE PENNENT ON THE DCC...49.30 THE BTL---48.20 THE SST...NOW LOOK IF IT BREAKS 48 HARD HOLD IT FOR A SWING SHORT 1ST TARGET 45...I LOVE IT SHORT...
QCOM-- VERY STRONG STOCK HAS NOT EVEN REVERSED DOWN YET AT 45. STRONG CHART FOLKS. BIT OF A NEGATIVE DIVERG CCI. 48.00 THE BTL---46.85 THE SST.
PMCS---IN PLAY A STORY STOCK ON THE INTC RUMOR, NOT A GOOD SIGN TO ME UNLESS IT'S TRUE. STILL AT THE TOP OF THE 10 WEEK ON A MAJOR HIGH POLE HERE CAREFUL YOU LONGS. 21.75 THE BTL---20.90 THE SST. 19.50 THE 3 BOX REVERSAL BACK DOWN.
OVTI---HEADSUP HERE EVERYONE..EPS ON THE 19TH WAS WORKING A SHAKEOUT EARLIER ON THE 12TH THIS THING IS SO WILD RIGHT NOW BE ULTRA CAREFUL EITHER WAY<VVBG>...THERE'S A TRIPLE TOP AT 60 AND A DOUBLE BOTTOM(DB) AT 55...56.05 THE BTL---54.90 THE SST IF IT TRIGGERS AND BREAK 54 STAY SHORT...
IMCL---THE STOCK CHART IS ALL OVER THE PLACE ON P&F LOOKS A LOT TAMER ON CANDLESTICKS. HAD GREAT EARNINGS AND A VERY GOOD DRUG. I AM LONG TRYING TO HANG IN THERE FOR THE VERY LONG HAUL..SAY 100<G>
38.05 THE BTL---36.90 THE SST.
NVLS---BEAUTIFUL CHART PATTERN P&F...MADE A 52 WEEK HIGH AT 45 AND JUST REVERSED BACK DOWN 3 BOXES TO 42.00 HERE. YOU CAN ALREADY SEE AS IT COMES LOWER THE STREET WILL BE BUYING THIS ONE AHEAD OF EPS FOR JAN. 38 IS THE MID OF THE 10 WEEK. 42.75 THE BTL---41.70 THE SST.
BRCM---OVERBOUGHT NEAR TERM SHOULD PULLBACK TO NEAR TERM S AT THE RISING 20 EMA AT 33.50 AREA. 36.20 THE BTL---35.15 THE SST
AMGN---LOOKS LIKE DEATH AND TAXES HERE ON ALL CHARTS..CANNOT EVEN MAKE A 3 BOX REVERSAL BACK UP. HUGH CASCADE DOWN OFF THE RECENT HIGHS. 58.80 THE BTL---57.70 THE SST...I LIKE IT SHORT HERE.
RIMM---FINALLY REVERSED BACK DOWN 3 BOXES OFF THAT UNREAL HIGH POLE. ALL HIGH POLES EVENTUALLY REVERSE. 44.40 THE BTL---43.25 THE SST.
QLGC---BUYING CLIMAX FRIDAY FOLKS..SHOULD CONTINUE LOWER HERE IF WE GET THIS ADDED PULLBACK EARLY THIS WEEK. 55.85 THE BTL---54.80 THE SST..
NSM---WE WANT TO OWN THIS AHEAD OF EPS IN JAN..REMIND ME WILL YA<G> IT NEEDS A GOOD SOLID PB HERE FOR STARTERS LET'S SEE HOW LOW IT GOES AND THEN REVERSES BACK UP...SITTING ON THE 20 EMA DCC CHART...41.75 THE BTL---40.70 THE SST---GREAT CHART
NEM---POWERFUL GOLD STOCK CHART NOT ONLY IS IT IN A PENNANT DCC BUT IT ALSO IN A CUP FORMATION TOO BOOT...I SAY BUY IT AND LET IT ROLL UP HIGHER WITH STOPS. I WROTE ABOUT THIS STOCK WEEKS AGO. I HAVE A P&F PRICE OBJECTIVE OF 77?..UH OH<G>...44.75 THE BTL---43.80 THE SST.
MO---OUR LEAP CALL PLAY..WHAT A STOCK WHAT A CHART THE WHOLE MUTUAL FUND INDUSTRY OWNS THIS ONE FOLKS. NO SELLERS THERE..I'D LOVE TO SEE A 3 BOX REVERSAL BACK DOWN TO 47 OR A PB TO THE MID OF THE 10 WEEK AT 45 TO OWN IT LARGE FOR THE GROUP I ALREADY HAVE ACCUMULATED SHARES FOR YEARS NOW. FOR THE DIV PLAY AND WRITING CALLS AGAINST IT...IT'S A CASH COW. THERE'S A SMALL DOJI FRIDAY WITH A NEG DIVERG CCI AND A HIGH ADX MAYBE WE GET IT RIGHT NOW. 50.85 THE BTL---49.90 THE SST.
NTAP---NEEDS A PB HERE AS IT'S OVERBOUGHT SHORT TERM..SOLID TRADABLE CHART. 23 THE 3 BOX REVERSAL DOWN. 25.60 THE BTL---24.50 THE SST---
TXN---AT THE TOP OF THE 10 WEEK HERE LARGE BEARISH STICK ON FRIDAY. LOOKS LIKE IT WANTS LOWER. 29.30 THE BTL---28.20 THE SST.
GNSS---STRONG CHART DCC. PULLING BACK A BIT HERE FOR A REST. JUST DID A 3 BOX REVERSAL LAST WEEK. 18.55 THE BTL---17.65 THE SST...
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THERE SHOULD BE SOME EXCELLENT SHORTS THIS WEEK IF WE BREAK THOSE 2 AREAS ON THE FUTURES. IF WE BREAK KEY NUMBERS ON THE STOCKS ON THIS LIST STAY SHORT IN A SWING PLAY FOR 2-3 DAYS USING TRAILING STOPS. THIS COULD BE GOOD. I WANT TO REMIND YOU ALL, "THIS IS OPTIONS EXPIRATION WEEK" ALWAYS NUTTY ALWAYS VOLATILE ANYTHING CAN AND USUALLY DOES HAPPEN. SO BE ON YOUR TOES. FOCUS AND BE COOL CALM AND COLLECTED IT COULD HAVE VIOLENT MOVES.
THE PASSWORD FOR THE ROOM THIS WEEK IS----------------------------plungecity.....................one word lower case letters...
NOT SURE ABOUT MONDAY CLASS YET AS I'M FEELING TERRIBLE WITH SWOLLEN GUMS WE HAVE 2 MORE CLASSES LEFT TO GO SO MAYBE WEDS AND FRIDAY..I'LL SEE HOW I FEEL IN THE AM.
GOOD LUCK EVERYONE
BEST REGARDS
JERRY
jerry olson
www.buyitbuyitsellitsellit.com
jerry.olson@verizon.net |
