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Politics : Idea Of The Day
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To: IQBAL LATIF who wrote (18350)5/12/1998 1:08:00 AM
From: IQBAL LATIF  Read Replies (3) of 50167
 
I wrote yesterday that << I think the action will be focussed on composites and 1860 now becomes a very
important support. I will use this as an indicator for my overall trading strategy, if we
have a double close above 1860 it will be good for the market.>>

I saw the weakness a shade earlier due to composite watching and had protected some exposure by selling some naked SOX calls well out of the money and buying some puts.I also added to some June SPM 1090 long puts.I will be out of these positions only above composite close of 1860 or a very good PPI/CPI number, whichever happens first.

Yesterday action in my opinion was dominated by too much fear, no one seems to talk about it but MSFT and 4.3% unemployment figure is working on the market, the bond money breaking thru 6% was a signal of uneasiness. I would now consider SPM 1002 test a possibility today as traders go in numbers on 13th and 14th well protected, bond breaking 6% yield disturbs me- may be it is because of upcoming TB auction of 34 billion $ ( it is an old technique to sell the bond pre-auction to make some fast buck however) This is one indicator which unlike mass hysteria of SPM pits should be not neglected and its impact not overlooked. DOW showed a good performance but eased later in the day --well below the target resistance but in next few days market prognosis is very volatile and active, it will not be able to break the range until DOJ and CPI/PPI clear the ambiguities of unemployment number.

I would recommend caution and checking for 1845 support on composite to see we break thru 1102 and test 50 days MA. An inability to go thru 5.92% reistance on yields indicates that as if bonds are trying something different from the market. I would like them below 6% for this 1120 to be taken out, apparently it seems that bond traders are smelling something which equities guys are overlooking. I have heightened alert situation/
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