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Technology Stocks : INTEL TRADER
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To: Trading Machine who wrote (6132)5/30/1999 3:54:00 PM
From: Berney  Read Replies (1) of 11051
 
TM, Re: Sticks and Stones

I expect that June could be the most volatile month of the year with 1) the FOMC at the end of June, 2) earnings warning season about to arrive, and 3) other normal fear and greed factors. You "might" enjoy this picture:

bway.net

I like to occasionally review the monthly OEX chart as it provides the macro perspective to maintain sanity during the day to day battles of the bulls and bears. The trend line (admittedly parabolic) since 1995 has only been violated to the down side once (the Aug-Oct panic). The upside is seldom pierced. The channel is currently about 595 by 710 and rising at about 8 points a month. It is also interesting that 595 is about where the 50 week moving average currently sits.

The important point is that we generally touch the lower trend line a couple of times a year. At the 659 close, it would take about 8 months for the trend line to catch up to this level. That would put us outside this year. Probably not a likely occurrence.

It's really hard to ignore that weekly sell signal for last week. Since we're sitting right in the middle of the channel, we could go either way with the same degree of probability. But then, there's that weekly sell signal.

I think that the short-term will be determined by how that OEX reacts at about 663. I show this to be the 50 DMA and the top of one of the down trend lines on the 60-min chart. So, I believe any close above 663 has got to be construed as bullish. Further, any close below 643 (which will correspond to about 1280 on the S&P) would set off all kinds of alarm bells.

We need not anticipate; we need only react. Plan the Play and Play the Plan.

PBTB
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