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

To: donald sew who wrote (34380)	10/30/2000 10:19:40 PM
From: John Madarasz	Read Replies (1) \| Respond to of 42787

Don't fight the big money players. ************** MARKET SENTIMENT ************** The Eternal Question By Austin Passamonte Optioninvestor.com No we don't mean why are you here; the question we're referring to is, "Do we have a bottom in place?" Our honest answer at this point would be yes and no. Yes is the answer for "is the worst behind us"? First let's define worst. The recent intraday low set two Wednesday's ago should hold any retest and failure to do so will find strong arms not far below. That means we are closer to the bottom than top. Most of the pain from recent highs on September 1st until now has been endured, absorbed and survived. That being said, Market Sentiment is pretty sure a retest will unfold and it will happen soon if this is the case. Analysts and people on the street are all polarized in opinion and plenty of facts could bolster either case. Here's our unbiased view of the highest probability. First of all, these markets remain quite weak and need to stabilize before launching forward with follow through. If the Dow didn't have several key components exhibiting strength each day we would be at much lower market levels across the board right now. It single-handedly is keeping a finger in the dike to staunch unabashed selling. NASDAQ charts are very weak and turning more bearish by the minute. This of course is subject to change, but daily stochastic and MACD values have stalled near 80% overbought zones and have begun to roll over. In addition to weak charts signals, two other big-money factors have us on alert. A huge block trade of 17,000+ QQQ Nov 81 Calls were in the market by someone betting $6+ million in collected premium we will see lower prices before higher. It takes solid information to move money like that into risk. Another player purchased 950 S&P 500 1350 puts @ 14.5 on Friday for a multi-million $$ wager as well. Should we heed this action or trade against it? Friday's latest COT report shows S&P 500 commercial traders still holding 10-year extreme net short positions in the futures arena. The small spec players have added greatly to their net-longs while the big boys haven't backed off a bit. We've been talking about this for months now and many type-A traders long ago dismissed its significance. Big mistake. These traders are the giants in our game and they push the pile. Apparently they feel odds are highest we will see lower prices yet and we refuse to bet against them, ever! Their track record is extremely good and one only need to look back at October 1997 and 1998 for a refresher. These were the last two times they sat nearly this net-short, and one look at a weekly chart of any index will tell you where the market was when they covered in early November each time. They are short to a greater degree now than either of those times. What are they waiting for? Lower prices. When will they cover and switch to the accumulation phase? When they feel a bottom is in place and not a moment sooner. Neither should we. Yes, all our raging bulls are pawing the ground and raring to go but what will that get you? Try to hold calls too soon for too long and the starting gate in front of you will turn to a squeeze chute into the burger factory. It's our opinion the highest-percentage likelihood is for the major indexes to sell down at least once more before our next really significant rally, which should be considered a strong buy opportunity for bullish strategies of all types Get ready for another profitable week of trading opportunity and please be prepared to buy calls or puts with equal aplomb. =============== commitmentsoftraders.com

To: donald sew who wrote (34380)	10/30/2000 10:20:35 PM
From: mtnlady	Read Replies (1) \| Respond to of 42787

"if the NAZ/NDX were to continue lower, I would get a CLASS 1 SELL signal in 2 days." Don - a class 1 sell signal on what? The NAZ/NDX or the DOW?

To: donald sew who wrote (34380)	10/30/2000 10:22:49 PM
From: Jack T. Pearson	Read Replies (3) \| Respond to of 42787

Regarding the divergence of the DOW and the NASDAQ: I think I understand why people are pulling out of the NASDAQ--momentum is going the wrong direction for overvalued tech stocks. But I don't see what good news is making DOW stocks suddenly so extremely attractive. High growth in revenue and profits? Lower inflation? Lower interest rates? Extremely undervalued stocks? Is the market anticipating growth from higher fiscal stimulus (no matter who wins the election, and discounting Fed reaction)? Or are DOW stocks just more attractive relative to the NASDAQ?