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Strategies & Market Trends : Tech Stock Options

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To: jjs_ynot who wrote (49404)	8/6/1998 9:39:00 AM
From: donald sew	Read Replies (2) of 58727

INDEX UPDATE ----------------------- Well we got our dump on Tue and our pop on Wed. Where do we go from here? Where is the next peak and how high will it be so we can initiate puts again? If this bounce continues, I feel that on a subjective basis that a 50% retracement to the upside is not unreasonable for the immediate short-term cycle(within 8 days). If one checks last October's dump the following bounce regained about 70%(800 DOW points) of the loss, from 6975 to 7765. The total loss for that specific OCT dump was 1100 DOW points. So if we use the top of this downswing at 9367 then the total drop was about 1000 points then the target for bounce based on a 50% rebound would be about 8850. However, if one looks at the chart carefully one could argue that the top of this specific downswing was 9041 not 9367. If we use 9041 then the total decline would be 679 DOW points. Then using the 50% rebound the target would be 8700 not 8850. Please keep in mind that I am only talking about this specific short term cycle (within 8 days). Of course there is always the possibility that this bounce could totally fail. Any Ideas anyone, would like to hear comments? Seeya

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