To: StockOperator who wrote (19128 ) 7/4/1999 1:09:00 PM From: StockOperator Read Replies (2) | Respond to
Where to we go from here? I think the best way to plan out your strategy at this stage of the game is to understand where we are currently. In doing so it gives the bigger picture perspective and allows you to anticipate the market's next move. First of all I think it is crucial to realize that prices for many of the stocks and indexes are bouncing off their longer term trendlines. This is important simply because a breakout into higher prices at these levels often represents a powerful move in prices. A breakout here also sets the ball in motion where the avgs are literally saying "hey these trends are still intact", besides placing all the pressure on the MARKET to follow-through on these initial moves. So in a week that has offered us an almost 600 pt move on the DOW, a 350 pt move on the NAZ since 6/15, which also represents a breakout of an almost six month consolidation, a breakout in the trannies that has just started, a break of a rising wedge on the RUT that is just now taking form, the beginning of a three month breakout in the S&P, plus a whole host of major reversals in the tech sector. My point being that this current bullish run is happening at very significant areas on the charts. So IMO the best way to play it is to fall on the side of what the market has given so far. A powerful rally appears to be unfolding and although nothing goes straight up, you would have to expect some backing and filling after such a strong couple of weeks. However, the way prices finished on Friday I would have to say that there's a very good chance that higher highs will be set this week. I will be watching the makeup of any potential give-back very carefully over the next week or so to get a better feel for the pace of the next leg up. The less give back now will offer us a trend that will only ACCELERATE as the weeks unfold.
