All: As I pointed out in my last note Monday evening
outlining the situation with Intel and the market indexes,
it was put up or shut up time. Obviously, Tuesday's trading
indicated the latter. Intel broke its technical formation
lower boundary and is now sitting very close to a support
(130 3/4).Other supports are 129-130, 26 3/8, and 23.
Resistance is now 34. Intel needs to hold in here and
reverse course and exceed 134 while doing so tomorrow. If it
doesn't, then trend is still considered down - which is
something that I told all on both Prodigy Classic and
Silicon Investor bbs days ago - when I started selling the
majority of my positions in it.
As far as the indexes go, they too have suffered some
damage, with the S&P the most and the Nasdaq the least. The
S&P broke down through a major support at 745 and its next
support is at 720 area. The Nasdaq is in much better shape
for the time being with supports at 1275 and 1250 with 1300
being a resistance area.
Now, we come down to another part of my previous note to all
on Monday evening. Tomorrow's final resolution will depend
on whether the sellers taking profit have the edge or the
mutual funds investing additional inflows of cash have the
edge. And, it's even possible that the resolution could
extend beyond that before everything is settled. My tactics
will depend on the characteristics of tomorrow's trading
actions. There are four possible scenarios as I see it. All
who have read me for some time are aware that I always on a
daily basis draw up scenarios for each market trading day -
and I trade based on which scenario the markets are actually
following that day. Scenario One has markets opening down
bigtime and continuing downward on balance throughout the
day; Scenario Two has markets opening down and then rallying
therefrom; Scenario Three has markets opening up and
continuing upward; and Scenario Four has markets opening up
and reversing to go lower. Again, my tactics are set - and
I have no intentions of letting the MMs reading these
comments know exactly how I intend to play each of those
scenarios. As I've pointed out before, the MMs scan the BBs
just like I do for info pertaining to their stocks. I have
received E-mail in the past from Market Makers and
newsletter writers and you name it. They are on the BBs.
So, in conclusion I would say to make Intel and the market
indexes prove to you exactly which way they are going to go
in here. Sometimes, it is better to be a little late rather
than too early - although I have went on record before as
saying that I personally like to be a little early. But,
a little early with some justification - not just to be
early at any time. Those that didn't jump on Intel Tuesday
when it ticked on up to 134 should be happy that they didn't
bite when the day's end came. Other opportunities will come shortly.
So, by tomorrow morning's opening, we will know of which
scenarios above have a chance to play out. Obviously, if the
markets open down - 2 of them will be eliminated; if up,
then 2 others would be eliminated instead. I will play accordingly.
All of my comments made on the BBs at any time are just my
opinion and I can be wrong at any time. Each person should
invest/trade at their own risk. Also, I don't advise other
people to trade options nor to use margin. Both are risky
for the average person.
Added: Armando, the last 3 tops to use were 141 1/2, 138 3/4, and 138 1/4. The 2 bottoms to use were 126 3/8 and 130 7/8 (made some days ago). When you draw line connecting all three tops and then
draw line connecting the two bottoms, you will find that this makes what they call a symmetrical triangle. We have already violated the bottom of this triangle which is not technically good. However, once in a while, even breakouts or breakdowns (in this case) can be shown as faulty - IF the stock will reverse course immediately thereafter and crawl back into the pattern (above 132 in this case). All for this evening. Good luck and good trading. Jack |
