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Strategies & Market Trends : Tech Stock Options
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To: Lee Lichterman III who wrote (53305)9/19/1998 4:21:00 PM
From: donald sew  Read Replies (1) of 58727
 
Lee,

>>>>>>> First, the weekly indicators are showing an at least short term bottom on many individual stocks and every index I track. Weekly stochastics are bottomed and poised for a bounce.......If these inconsistancies were in fact a subtle clue to the short term market direction, we could be poised for another short term rally to the resistance areas on the indexes around 515 OEX and 1680 NASDAQ (Sorry don't have my DOW chart in front of me). This could fool allot of traders as these targets would temporarily breach the downward trend lines and 200 DMAs though I wouldn't expect the highs to last long. <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<

I also checked the weekly stochastics and you are correct that they have bottomed and could bounce up next week. Please understand that I use over 10 different technical indicators, since I feel strongly that a wrong reading can be given by an individual indicator. the stochastis can sit in the overbought region for a long time. Look at the reverse - check the period of 10/96 - 3/97 and JAN-APRIL 98, and see how long the weekly stochastics stayed in the overbought region.

A bounce to 515 on the OEX will be about 8200 on the DOW and that is possible. If that was to happen the will really fool many since it would break the 8100 resistance, which is strong and many will interpret that as confirmation of a recovery back to an uptrend.

For now the short-term downswing after the CLASS SELL on WED, should last 2-4 more days. At this time I suspect the bottom to arrive TUE/WED/THUR with the reversal to the upside to start WED/THUR/FRI. I should be able to tighten that time frame on Monday.

Seeya
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