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Strategies & Market Trends : The OEX... gasp!

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To: Stuart Briscoe who wrote (299)	1/8/1997 10:12:00 AM
From: Chris Baker	of 658

Stuart and all OEX Gasper's - Public Market Commentary from Terry Bradford, at baresearch.htm January 08, 1997 (excerpt from the Index Traders' Edge) MARKET COMMENTARY It took a little longer than we anticipated but bulls did come back to this stock market late yesterday. Why? Market watchers attribute the strength to technical buying and short covering. We concur. When stocks looked as though they would hold support at SPX 744 it was all over for the bears. A series of huge computer buy programs lifted the markets sharply higher. Of course our market timing tool has been bullish since the primary buy signal January 2. We should not have to tell you that session saw the DOW sink some 95 points before rallying to close with just marginal losses. A major bottom indeed! What can we expect today? Much will depend on the health of large stocks but our technical work is solidly bullish. We are looking for an explosive rally today. Remember, the stock market is based on momentum. Despite a very weak tone in the bond pits, stocks were able to move further into record territory late yesterday. That will not go unnoticed. Bears have every reason to be alarmed. All declines during the next two sessions should be very shallow. We remain bullish. SUPPORT/RESISTANCE LEVELS Yesterday's tape was poor for much of the session. However the magnitude of the late rally suggests further strength in the early part of today's session. The DOW has been the strongest of the indexes. Yesterday's close at 6600 paves the road for an advance to 6750 this week. The SPX is still the weak sister. We have been telling you to expect a rally to 760. That level could come as early as today. If bulls can get through that level a rally to 767 cannot be ruled out. The OEX should explode through resistance at 739.60. The next important resistance level is 746. FIVE DAY FORECAST The following five day forecast is based on our proprietary market timing tool. The current trend is UP. . Wednesday: another firm open should lead to an explosive rally. The market closes very firm. Thursday: a weak open. A secondary buy signal occurs mid morning. The session high occurs at mid afternoon. Friday: a weak open replaced by market strength into mid afternoon. a primary sell signal occurs at that time. Monday: expect a weak open to be followed by a very weak close. Tuesday: the session begins weak and selling persists throughout the session. Expect a very weak close. CURRENT STRATEGY Our strategy remains unchanged. We added OEX JAN 740 calls yesterday at our 10:15 ET update. At this time it is our plan to remain long through early Friday. We have no upside target at present. Please note that we have raised our trailing stop to protect unrealized profits..

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