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Technology Stocks : INTEL TRADER -- Ignore unavailable to you. Want to Upgrade?

To: MonsieurGonzo who wrote (6387)	7/25/1999 12:04:00 AM
From: Berney	Read Replies (1) \| Respond to of 11051

I thought the Dudes that don't follow the MDA thread might enjoy this. Why Am I Long? I've got shorts to the left of me (Jim & GZ) and longs to the right (Don) and the end of the world is surely upon us. Much has been made of the uncanny similarity of this year to 1998. Let's look at OEX. In 1998, I compute that OEX started its run on 6/16 with a low of the day at 521. 23 days later, on July 20, we recorded the high of 582.27, or a move of 11.7%. On July 24, 4 days later, we recorded the low at 552.68, a decline of 5.1%, 29.59 points, and a Fib retracement of 48% of the previous move. It is interesting to note that 7/20 was a Monday and 7/24 was a Friday. The following week, we made two attempts to rally, but could never get above the retracement of 39%. The market closed on Thursday, July 30, near the high of 562.40. It then only took 4 trading days to test the the breakout with a low of 518.68 on 8/5. In other words, we had retraced the entire move. This is where the real battle was fought. Over the next 16 trading days, the market was moving 4-5% every other day, with six tests of the base. At the end of this period 8/25, there was a failed double top. The next test of the base, two days later (8/27) failed. 23 days to the top and 26 days to the failure of the base to hold. It then only took 3 days for the OEX to lose 9.8%, recording a low of 462.66 on 9/1. The story continued, but enough (probably more than) for now. Fast Forward to 1999. I reflect that this run began from a low of 665.57 on 6/24. The time for the run was 16 days and moved 70.29 points or 10.6% to the high recorded on 7/19 of 735.86. A 38% retracement from the low recorded Friday would project to an OEX value of 710. IMHO this is where one of the principal battles is going to be fought. A failure to penetrate this level could be the catalyst to move to the breakout point at 665 in a matter of days. Why might this happen. Hell, I don't know, but I'm sure that afterwards we will know what the cause was. <g> May we live in interesting times. I hope I didn't bore anyone! Berney