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Strategies & Market Trends : Stock Attack -- A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: donald sew who wrote (26784)	8/4/2000 2:40:26 AM
From: Lee Lichterman III	Read Replies (1) \| Respond to of 42787

Some of my comments form our site tonight.... Of course it is always easier in hind site, but this morning's post I made about it being hard for the market to decline significantly with a strong dollar and Don's post about never dropping from over sold readings should have been the clue to Buy the Dip ( BTD). I have to admit I hesitated and missed a lot of the move. On the other hand, there was no rational reason for today. The sell off was an over reaction to a lot of bad news but then the rally was total nonsense. NAPM report showed that services is indeed slowing down and that is NOT good news. The pundints have been saying for the whole bull market that the reason "this time is different" is because we are a service related economy now thus we have more productivity. If that is so, the NAPM seems to be saying that productivity is reversing and we will see less productivity per employee in the future. Add to that the initial claims number coming in about 30K light of expectations and it just goes to show that labor force constraints are worse than ever. SO basically we are looking at less output but having to pay more for it due to a lack of labor force. Lets buy! OK, that is the FA behind today. On to what Challo posted to piggy back off of. Technically, today was a beautiful up day. High volume rally off of over sold levels, broad in tech ( at expense of non tech ) and bullish engulfing candles all over the place, in many instances encompassing the last 3 days of trading. Very very bullish. Here is what I see wrong. Tech moved up at the expense of non tech. NYSE TRIN was over one almost the entire day. GE slid all day, IBM and numerous other DOW stocks are starting to read over bought and I am starting to get some weekly sell signals on DOW stocks like MMM. HWP seems to be forming a bear flag though it could take a week to break down. The bullish perspective says that due to the bullish engulfings and the bounce off of support levels etc, we could rally up to around 3950 on the NASDAQ or 97 on the QQQ based on my forks ( see charts). However it remains to be seen what the news will be tomorrow especially since we are sitting just under the resistance lines for the NDX. Bad news and we could fail here and drop. As I posted this morning, my stock picking is horrible but I am still looking hard at DELL and possibly GTW although it looks like it could hesitate longer than DELL. ( I did scalp DELL today but was afraid to hold it through the employment report) My weekly shows a buy, the daily looks good copming off the easily identifiable channel connecting lows and highs, and I show both the Computer Software Index with an oversold and Computer Tech Index with a hard buy signal. Other picks are more risky so I am hesitant to post them. especially with my luck this week, but here goes RFMD weekly looks great but daily shows it stopped just shy of resistance around 81. WCOM weekly is a possible but daily looks like crud, BGEN bounce as expected but lower high probable on over bought BTK index and double tops on many leading Drug stocks. Possible counter trend play ( High risk ) in AMAT playing the over sold and Price Channel ( I would likely pass). INTC reversal pattern like what Challo posted and a buy signal on my system. QLGC possible dead cat bounce play but acting very weak so far ( I would likely pass). A super high risk Play on JDSU and even worse JNPR. EMC made a nice bounce off the fork today but I have no signals on it saying to buy. Still this stock is a street favorite and it is almost like GE, being one of the first to dip on for a perceived safe play. Tough call here playing a line but no signal. Best short in a good market came up with SLB at 76 3/8 tonight and probable headed to 70 area. Danger here is price spike in Oil futures. In a down market though, it may be seen as a safe haven defensive play so this is more a short for an uptrend in Tech. Watch list add for HWP on the apparent Bear flag forming. I only post these so you can take a look, dig deeper over the weekend and possibly watch them trade tomorrow to see how they act. I feel tomorrow could be very important as the reaction to the news may determine our trading for next week. A bad report and this rally is over and a death spiral may start. Good news and we may rally until we reach Don's reversal point for a plunge after everyone gets too bullish again. My main concern is the lack of fear up to now. We have just finished two weeks of choppy markets, gap downs, plunges of 100 points and record volatility and yet the RYDEX ratios, VIX and put call ratios never even showed the slightest bit of fear or even defensive caution. CSCO reports next week and there's a boat load of options on it. As of a couple days ago, I had my copy cat system of the max pain trying to hold it between 60 and 65. In the lack of earnings vacuuom late in the reporting period, the reaction to CSCO could be a big determinant of market direction and gauge of sentiment. Exhuberant rally or sell the news? As for the XAU, I show a drop to the mid 40s (46)before the next bounce but who knows. Grain futures dropped today which shows that the correlation of grain to gold does seem to hold water still. The strong dollar is killing commodities. Funny though, the options I watch on the gold stocks didn't move much. Darn!!!! I want a few strikes cheap. That about covers all on my mind tonight. GLOBEX triggers are neutral. Lets see what the employment numbers say. FWIW - The employment report break down was posted on SI and was about 60% rally on the news over the last few years. However the market has rallied on every report since August of 99 which is abot when inflation fears first started. Tomorrow COULD be one year straight where we have rallied on bad news of an ever increasingly tighter employment environment surpassing a 30 year record level. What irrational exuberance? -gggg- Good Luck, Lee