Dennis, it depends on the time frame we are talking about. We could both be right.
This is the way I read it and I have to add the caveat - BWTHDIK!
AOL is currently at 118.75, after a midday high of 120. It is a high pole formation in P&F, with sector at 70%, and would retrace 50% of its most recent climb. The last move up was from 86 to 120 (ouch for those of us who missed it!) That is 34 points. 50% retrace brings it to 103. And, keep in mind next week. I think AOL can add another 3 to 5 points max. Maybe 2-4. Then, Carpino's April drop. I don't see April being the big one, though. Depends on outside influences.
Here is where I'll be watching. I'm kind of thinking that GS might, just might, take back that last 1/4 point that he gave us last fall. He has made reference to that fact. In which case, I would expect to see a bit bigger correction (10-15%) Or, if he doesn't do anything, (ie: no further rate cut), the market might not like that and drop 5%.
Now, this AOL retrace is s-t only. If dow drops 5-10%, we'll see about AOL. It is the leader right now, so if J6P doesn't panic, sp-500 won't drop too bad, nor will AOL.
If we go back up May-June, AOL will pop again, s-t, cause J6P may think it's over.
A further decline in July-August, and a worse one this time, will bring AOL down more. A rise in interst rates in Aug-Sept causes the crash in Sept-Oct. Then we get AOL at 60! (Don't forget - last July-Oct, AOL dropped 50%!!!!)
How does that scenario sound? More important, do I want to try to play the s-t moves? If I can get AOL at 60, I'll (maybe) mortgage the house!!! <VBG> |
