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Politics : Idea Of The Day

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To: IQBAL LATIF who wrote (14688)	11/19/1997 5:25:00 AM
From: IQBAL LATIF	Read Replies (2) of 50167

Morning comments- SPZ- Test of 940-42 area I wrote yesterday cmae as no surprise- now ball game changes -948-49 becomes an overhead resistance and we need two closes above that, a test of 935 area is a real possiblity considering bonds are too strong and flight to quality still holds. I would suspect test to hold if SOX does not weaken further. I will assume markets looking for some news and further confirmation to pierce thru our new resistance of 948, again two closes above this confirms a trend developing. Bonds- I think this is a big danger signal for the overall market, we are at a strange configuration bonds are flying despite of some strong economic number. Whenever smart money of bonds develops this anamoly some thing is bound to happen, either bonds go lower now a full one point higher at 118.31- 119.04. If we have again a higher close on bonds tonight I will recommend protective purchase of SP options like 870 of Dec- a higher close associated with SPZ above 948-49 would not require such an action. Keep watching at bonds they need to give up or otherwise the market would. SOX- 298 is a close below 300 also INTC TXN AMAT other bell wethers closed below our levels of yesterday, we will need to see some strenght in SOX today a break of 295 today on closing basis bodes bad for the market. Keep your positions hedged below 295 as test of 280 becomes a real possiblity so will this movement be tied with 928 on SPZ. SOX holding of 280 is lichpin to overall market stability- my whole premises is dependent on S&P selling less acutely then overall NAZ for that divergence in conduct of SOX and DOW has to be seen in a very early stage. Like 2% of DOW should not anymore take 2% of SOX away last night it happened lopsided 3% of SOX against minucule level of DOW/S&P, but a continued trend will indicate bad omen. However, I think SOX should close above 300 today and a test of SPZ 948 may be possible. Nekkei- Last night 16800 was not taken out and market retreated to 15800- a 12% move up associated with 5% move down is 'profit' taking but bear trend reversal needs two closes above 16800, this should happen soon- a steady movement towards this goal by Friday is a good possiblity. March JPN 180's are a good trade. Bellwethers- Last night INTC MSFT IBM TXN closed well below levels which I indicated yesterday- will need to see the levels restored like 80 135 100 100- this is important for overall S&P stability although IBM is a DOW stock the market cannot go forward if these levels are not broekn upwards on two closing basis. My bias remains bullish within a normal correction a move from 900 to 954.7 on globex now needed to retrace to 940- that was basis of my yesterdays morning level. Supports to be long and square near resitance like 948-49. A close below 928 on closing basis will be a signal to test 920. See you guys tomorrow morning. Bi Bi.

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