Paulo and All: Well, we have broken through the 5 day, 10 day moving average lines and are now setting midway between those 10 day and 20 day moving average lines. The 20 day MA is at 125. I have a support that is also located at 125. Later support is at 119 1/4 to 119 1/2. 50 day MA line is around 117 and going up.
I have put on the Intel-Bounce BB on Prodigy many times - that when Intel (or any other stocks) gap and then close it and then go more than one tick below the previous day's close - it's time to go.
This is not an absolute, but it is correct the majority of times. I leave it to others on this BB who have read the above on Prodigy to collaborate how well this has worked in the past. And, today Intel closed it and on the second tick below yesterday's 129 3/8 - you should have been out of the long positions - to play the game another day.
Those reading me on the Intc-Bounce BB on Prodigy and here on SI: Had you went into the IBM and Dell put positions that I have mentioned on both BBs for quite a few days now, today - you would be laughing all the way to the bank.
Nevertheless, in my opinion, it is getting close to turnaround time and you will have to watch the markets closely tomorrow to sell the puts at the appropriate time and also to go into the calls again at the appropriate time.
I do have some concerns though. First, the Dow and S&P and Nasdaq have all broken uptrending trendlines signalling possibility that if we do get a bounce in here - you better watch things closely. Intel has broken several of its supports and moving average lines. However, the schocastics in the Dow and S&P are about as heavily oversold as they have been all year, including the July lows. The Nasdaq is getting there. As I had put on the Intc Bounce BB last night I expected the Dow and S&P to outperform the Nasdaq in here because of that difference in the oversold positions that the schocastics showed. And they did outperform the Nasdaq today.
In conclusion, I feel that the opportunity for a buying of calls in Intel will be available no later than whenever the Fed concludes its business and it is apparent that there will be no changes made to policies. We will either rally immediately during the day in Intel or the MMs may take it on down to around the 125 area (even a little below it) before bringing it back up whenever that may be. I would be surprised if the MMs go any further than that before expiration day. This would wipe out enough people holding the calls all the way up and provide them a base to start things back up to wipe out all the people who have already bought or may buy the puts in here. This is not a time though to buy any more puts. All the foregoing assumes that this is just a good correction and not the start of a bear market. Personally, I would dislike the markets going much further down in here as I believe that it would destroy the psychology of the individual investors - ultimately resulting in wholesale selling of their securities which in effect would negate any possibility of a decent yearend rally and might well set the tone for a downward bias in the future. Just my opinion, but I believe if the MMs are smart, they need to play this to keep things going upward - as most investors do not buy puts or play the short side, the amount of transactions will decline substantially for them (the Market Makers).
Finally, I'm looking to buy sometime tomorrow if the opportunity will present itself. Again, I could be early and if wrong, I would have to bail out and try to reposition again later. But, 14 points off the top in Intel does leave some room - as long as things remain bullish. Still, I'm looking for a whole lot of continued volatility with lots of whiplashing in here. Good trading. Jack Back on much later tonight. |
