James- The market move on DOT from 614 to 635 was good, considering DOT it had full four sessions basing action, a great thing for the biggest speculation index in the town gg, if we have another close above 628, I think we may see higher momentum in internets. This is what they thrive on and this is how COMP may be helped, premiums on calls minus volatility were low early in the session, although they showed some life later in the day as EBAY rallied hard along with AOL and EGRP. I think next resistance levels in individual internets stocks I like to follow are, we need to cross these levels if 675 is to be breached, it is good trade to go long towards the close if we are seeing a close above this 628 area, I will only select June's long calls AOL 130, EBAY 200, EGRP 120, AMZN 160, SCH 112...
Market agan failed to take out that 1364 resistance, it did go to test 1360 area but failed and SPM never really could stay that level a closed below critical 1352,, if you look at the chart this is not a good formation. This market needs fundamentally good news on inflation front to get going. I think this market will take out 1352-60 band only if 2555-65 is breached solidly that apparently is not looking too convincing. Although yesterday DOT action might just help but it needs little more doing.
I hope to see back of 1364 area but only after the market is sure of end of war in Serbia, end of frictions with China. Coupled with good news on CPI PPI front. A number that will be considered strong will form the basis of a short term sell off, it will always be good to expect some ' loud number' and also expect that we will trade down to see a level for getting in a little cheaper. However, if 1364 is taken out one closing basis I will still wait for the second close for me this is a very important band and I will like the financials to take out 907 area on BKX and yields heading lower, if these parameters are Ok.
I think we can get in outside the money calls at these levels for me a breach of 1364 will take us to 1430, but before that the risk- reward demands some good analysis and meeting of our objectives.
My key stocks like LU INTC EMC MSFT NOK IBM CSCO TXN should all show a sign of collective recovery and NDX should look an index ready to take out old highs. So far the individual stocks charts do not corroborate with the index, rather leaders are sitting below 50 days EMA and therefore very unconvincing to make a long trade here except a inter day in and out trade. I think we are sitting on a very nice level and as it was amply demonstrated last night that with best of intentions the market just backed off, market does not like uncertainties and presently we have enough, although none looming too bad on the markets on longer term horizon but enough for day traders like me to take notice..
Possibly, China can evoke some kind of crisis in South China seas just to attract attention. I did not like the sharp sell off in China last night, any further breach of stock index will put severe pressure on HSI and ASEA. It may impact Yuan stability and if market gets whiff of some kind of pressure on Yuan all the ASEAN currencies shall be impacted. The longer the crisis continue the level of uncertainties will cloud the direction of this market and I know one thing that market is at levels where I it is very sensitive to these semi strategic and fundamental issues.
All of these issues will be resolved soon, possibly a good CPI PPI number and withdrawal of Yugoslav army from Kosovo may lead us to higher plains, but let us get that range sorted out first.. |
