Sonny, I can feel your gut churning from here. I am going to post last night's and today's intraday update Email which pretty much says it all. If IBM and other Dow components can continue higher tomorrow, maybe they will save the day and the week.
If a rally does develop somewhere from here to lower levels tomorrow, it could be a furious one given the number of high flying leaders like IBM and INTC that look potentially still quite bullish. If we don't rally, I would be worried...
4/23/98 OVERNIGHT UPDATE 2.17 AM ET
I thought yesterday's run was terrific, especially so for star of the day Intel (up over $5 or 6.49%), but now I have a bit of an antsy feeling about how things will go tomorrow. FNTN acted great too. Built nice value at higher levels.
It could be a less enthralling day today than yesterday for Blue Chips. I didn't like the way IBM turned down so sharply from its high at 120 and Dell too turned down a bit towards the close. GE and GM also did not act too great.
There was zero response tonight from the S&P Futures to the fact that Disney was up 5 bucks in after hours trading. To me this is uncharacteristic and I find it inwardly troubling. S&P is acting a lot weaker than usual tonight which is also making me very un-easy unless we recover smartly before Thursday's open.
Then, I might feel a whole lot better. Also the sharp increase in volumes today may be a good sign if we continue higher or a bad sign if we reverse.
We may need to be particularly alert and attentive in Thursday's session. Could be a real critical day.
4/23/98 INTRADAY UPDATE 1.02 PM ET
Action is not good today except in FNTN which is trading solidly higher and has now broken all major downtrend lines. Internet stocks are starting to recover from their corrections of the last day or two.
Some of the higher quality (Internet) issues look like good buys here - take your pick. Even though Sentinel took some profits on DBCC yesterday, we are getting some early buying indications here. If CBS spins off Market Watch - This stock (DBCC) will be $20 bid in a N.Y. minute so the strategy has to be to religiously buy dips.
This strategy worked perfectly for Mellon Bank which has been on my radar screen all year and has steadily risen from a low of 56 to a high of 80 this week on word of a hostile buyout by Bank of N.Y. Even though it has been common knowledge that this was the perennial takeover target, it probably frustrated the hell out of most investors who wanted instant gratification. Our strategy is when an issue rates a 10/10 on our star ratings, buy dips and ye shall be rewarded. I guess we can state that our instant gratification finally came this week. I smell a similar gratification pending for DBCC.
If this deal goes down and the market overvalues it, Internet stocks will look cheap at these current levels.
The Blue Chips, Transports and larger stocks look vulnerable to some sort of correction here so if you're nervous - I would personally sell or go flat and wait and see how this thing unfolds. Best to be out for now.
I would use a buy dip strategy in grains right now, as we near the end of the month.
Bonds are at a critical level here. If the 30 year bond yield turns back down from 6%, bonds might get a reprieve, but in all honesty any further breakdown in June Bonds is going to negate this scenario. The key support is right here around 119~20. If this support doesn't hold, yield will penetrate 6% and Bond action would portend sharply lower prices as I previously outlined.
Coffee prices are headed down big time today. The rally we got two weeks ago was a death rally. No bottom in sight on this one for quite a while. In contrast, Cocoa is in a major bull market.
That's the latest
Best Wishes
Wiz |
