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Strategies & Market Trends : The Market Beacons -- Ignore unavailable to you. Want to Upgrade?

To: Magnatizer who wrote (453)	3/14/2001 9:39:53 PM
From: Magnatizer	Read Replies (2) \| Respond to of 1298

Wed commentary geocities.com link is to my page on The Market Beacons site. Daily commentary has the html version of the following and it has links to the charts. 3.14.01 Due to the new web site chart links prior to 2.16.01 will link to charts which are from 2.09.01. Magnet supports and resistance spreadsheet SPX (Wide Variety, Large Cap): SP 500 mags (Left side is magnet horizontals, right is magnet trendlines) SP recent mag trendlines (Magnet trendlines from 1990 on) SP 500 close up (SPX recent mag tlines in a close up perspective) Commentary refers to the red downtrends on the SP recent mag trendlines chart 2.24.01: Retesting the 10.24.00 to 12.7.00 trendline here. Several points are to be made from this chart in both forest and trees outlook. First I define which lines and areas I am commenting on (the red downtrends which are magnetic, just change of color): 7.10.00 to 10.24.00: this is the top red downtrend. Will call this trendline A 10.24.00 to 12.7.00: this is the middle red downtrend: Will call this trendline B 2.7.00 to 3.6.00: bottom red trendline: Call this trendline C The lower right corner of the chart shows a triple magnet trendline cross in Mid May. Three fairly important trendlines are involved in this cross. Trendline B, C and 11.5.90 to 1.18.91 uptrend. side note: the red horizontal dashed trendline is simply to note the location of the Dec 00 lows, not magnetic. I note the areas where trendline A and C held support and resistance using arrows. The arrows with the question marks are where I feel the SP is to trade in the coming 3 months. In the short term I am looking for a move down to test trendline C. I will look for signs of a bottom and will be wanting to go long in the mid-upper 1100s. The target will be trendline A. When trendline A is reached I will look to go short for a move down into the tri magnet trendline cross. This is my most likely scenario. Another, less likely, scenario is for trendline B to hold the SP here and a move up to trendline A will ensue. I would still look to get short at trendline A but not as aggressively as I would if trendline C were first tested. Why I find this to be a less likely scenario is due to the inability of the SP to bounce strongly off trendline B when it was first tested on Thursday. A bullish bounce would have needed to be immediate and undeniable (see XOI mags chart, early Jan, for a prime example of a bull bounce off downtrend retest). What we are seeing is intraday strong penetration of the trendline and moves back up in the last hour to recover it. This action is weakening this trendline and therefore, I doubt it can hold another onslaught. 3.01.01: The 10.24.00 to 12.7.00 trendline is very, very sticky. The move away from it (in either direction) is gonna be vicious. A close outside of 2.27.01 high (1272.8) or today's low (1214.5) very likely sends the SP to the outside of the channel in 2-3 days max. 3.06.01: Today's attempt to move away from the 10.24.00 to 12.7.00 trendline had a weak ending. Topping type bar formed today and short term indicators are set to fire a sell signal any day. The one thing bulls have going for them is the RSI 3 had a I.H.S breakout today. Overall, the negatives strongly outweigh the positives here and the upper 1100s are my target Short here with stop of close above today's high. 3.12.01: Watching for bottom signs. I have a lean toward a bottom here but indicators are not supportive of my lean. Short term indicators mixed but will take a few more days of down/sideways action to set them up to fire a buy signal. Looking at 2-3 days of golf. Remain short SP with stop of close above today's midpoint. 3.13.01: Cover short. Long with stop of close below today's low. Bottom of channel held well enough today to consider it a fair warning from the bulls that the move to trendline A has begun. I really like the risk:reward of this trade considering the target is in the 1300 area. Major test of overhead will be the 10.24.00 to 12.7.00 trendline. I do not think breaking through it will be an easy task. It will take an extraordinary amount of bullish energy to complete the move to the top of the magnet downtrend channel. The call to cover short was canceled with this mornings update. Current stop to reverse from short to long is a close over the high of the prior TWO days. Short term indicators in much better position to signal a buy then they were after Monday's close. Nas 100 (Large Cap Techs): Nas 100 mags 3.8.01: Sell stop hit. Short 2/3 bucket QQQ puts. Also filled gap. Today's move has a simple gap fill dip potential to it else I would be full bucket short 3.10.01: Held 2/3 bucket of QQQ puts, did not add to position on Friday. Went with a variety of individual stock short positions instead. Current stop on QQQ short is a close above 3.06.01 high. Mag trendline cross this Thursday. Same ole plan... up into it bearish, flat bearish, down into it bullish. 3.12.01: Took ½ of position off table today on the 1712 quarter zone test. It appeared as if it would hold support so locking in profits was the prudent action to take. Closing well below 1712 is a positive signal as far as Thursday's magnet cross goes. Looking for downswing to continue into the cross which is bullish. Next mag support is 1624 weak horizontal. 3.13.01: Stopped out of remaining short position today (based on a 60 min chart signal). Looks up into Thursday cross now. Not taking it long as I feel the Nas 100 is to top on Thursday. Cross tomorrow. Nas 100 is moving sideways into it. Preliminary read is the action hints of a bearish reaction to the cross. I will watch for an area to start a short QQQ position tomorrow (1/3 of desired position size). Tomorrow's high/low will be my pivots for adding to the short position (assuming I build it) or going long. A close outside of tomorrow's range will dictate my action. Close above tomorrow's high: buy, below the low: sell. Dow 30 (Blue Chips): Dow 30 mags 3.7.01: Buy signal today in the close over yesterday's high and bull move up through yesterday's topping bar. Must reach 10922 horizontal (minimum) before turning back down here. This is critical that it does not stop short. Set to fire a new magnet signal before the end of the week. 3.10.01 Dow gave a new mag signal on Friday. This is one of the odd cases where the magnet trendline is a connection of the highs and the trendline is a Uptrend. This is caused by the signal day low being lower then the prior signal day low (1.25.01). Therefore the trendline is anchored to the highs, regardless of Friday's high being higher then 1.25.01. Dow also failed to reach 10922 before turning back to close at the neutral zone (10648). This is a warning shot to bulls and I like Dow short with stop of close over Friday's high. Short term indicators fired sell signal on Friday. 3.13.01: No updates, remain short dow. Short term indicators set to fire buy signal. Cover half of short at the open tomorrow. Move stop down to a close above prior two days high on the remaining position. This is not a stop and enter long (SAR or stop and reverse) order. It is just a stop exit short. Russell 2k (Small Caps): Russell 2k mags 3.03.01: In a normal (neutral/bull) market the Russell would be signaling a move up to 515s. It has bounced off the dual mag downtrends in the 460s twice. Worth a shot with stop of close below Friday's low. No margin. 3.10.01: Move stop to below Friday's low. No need to close there. 3.13.01: Stop hit. Neutral Rut here. No updates. BKX (Large Cap Banks): BKX mags 3.10.01: Friday's action was formed a topping type set of bars. Short term indicators also triggered a sell signal. Short with stop of close over Thursday high is how I see BKX. 3.13.01: Inside bar formed today. Move stop down to close above Monday's high. Same as Dow 30. Stop moves with market. Close above high of the prior two days. CRB (Commodities): CRB mags 3.06.01: Paper short today in the 224.25 area. I do not have my futures account funded right now else I would have played it as an actual trade. Current stop is close above today's high. If anyone knows of a good proxy for CRB index I would love to hear about it. 3.08.01: Near new mag signal. Likely by the end of the week. 3.10.01: Missed new mag signal by 1/10th of a point. Regardless I remain short CRB (paper trade) with 216s target. Stop has not changed. 3.13.01: Took 2/5ths of the short off the table today at 220.3. Wanted to lower ave cost basis down and the sell off last few days has been to easy of money. It can't last. I will likely exit 1 of the 3 remaining contracts tomorrow if 216s are tested. Stop on remaining position will move with market... same ole... close above high of prior two days. Short term indicators set to fire buy signal. BTK (Biotechs): BTK mags 3.06.01: Due to the wider indexes firing warning shots left and right I am going to lean toward making the BTK get me long. Stop buy is close above 2.26.01 high. Until then I am neutral BTK. Could argue a sell signal fired today with a loss of the short term uptrend (2.23.01 to 3.01.01 anchors). If the BTK takes out 2.23.01 lows on a closing basis the upper 300s jump to the forefront. 3.12.01: Short term indicators set to fire buy signal. I will be looking for a pop to the 520s. Then watch closely for topping pattern/topping indicator setups to form and get short for the ride down to upper 300s. 3.13.01: Buy signal oooo so close today. Good enough to take off shorts and wait for the pop. BTK does have a double bottom in place with early Jan lows. Risky position (considering ultimate target of upper 300s) would be a long here with stop of close below today's low. I am not going to play it. The 522.8 horizontal did a good job of topping out BTK today. Now on watch for topping pattern. Still flat BTK. Short term indicators are set to fire buy signal so getting short may be accomplished above 520s if it plays out as a normal signal would. SOX (Semiconductors): SOX mags Gottfried's excellent Semi charts (updated near the end of every month) I missed a new magnet signal on 3.07.01. The new mag trendline and xmag (formerly known as experimental mags) are on the chart. Using the xmag and new mag trendline the SOX is a short with close over xmag downtrend (white dashed tline) stop. It actually fired the signal on 3.08.01 but I missed the 3.07.01 signal. Tough to call it a short now as optimal entry has been missed. I will say I would not long SOX here. I will wait for a retest of the xmag to get short. Xmag hit today. Short with stop of close above today's high is my call on SOX. IIX (Large Cap Internets): IIX mags 2.28.01: IIX has seemingly failed to take advantage of last Thursday and Friday's magnet trendline crosses. This is the second straight time the IIX has failed to reverse downtrend with the mag trendline crosses. I get the picture. Looking to sell rallys in IIX. Best entry is above 250. No updates. XOI (Oil): XOI mags 3.12.01: Stop hit on remaining index long. Also covered short on BHI today as it reached it's initial target. Opinion on XOI here is short with stop of close over Friday's high. Stop now moving with index. Close above high of prior two days. DJTrany (Top 20 transport companies): Dow Jones Transports Mags 3.07.01: A little problem with the prior trany chart. It was made using theoretical data. I caught this today. The quantity of actual data which I have is much less then the theoretical. Therefore I am going to do something new with the trany chart. The chart link is of the magnet trendlines (no magnet horizontals). The purple horizontals note where the magnet trendlines were when the market last touched them prior to trending up or down. First the discussion will focus on the left most purple horizontal and the magnet trendlines tied to it. The anchors for the magnet trendline are 12.29.99 to 3.14.00. On 3.15.00 the tranys exploded through the trendline without testing it sufficiently. They proceeded to climb the blue dashed trendline (this is a magnet experimental trendline). Once they fell away from this trendline the target would be first a return to test the area the 12.29.99 to 3.14.00 trendline was at when it was left behind (purple horizontal) and the next target would be the trendline itself. This second target was HIGHLY unlikely as the slope of the downtrend took the line well out of play in a hurry. Moving to the top purple horizontal and the magnet trendline tied to it. The reason this area is noted is this magnet trendline is the only uptrend in the recent action for the tranys. The tranys moved off of the retest noted in the above commentary in a direct line to the horizontal created from this (3.14.00 to 7.5.00). This area continues to play a key role: it marked the low last week. The remainder of the discussion will focus on the recent action. The tranys moved through the 7.5.00 to 10.27.00 trendline strongly on 10.30.00. It left the line untested. After loosing the experimental in late Nov 00 the target was a return to test the horizontal in the 2500's with a secondary target of trendline retest. Thus far it has failed to do so implying bullishness. Until a new magnet trendline is formed I will stick with the return to test the 2500s as my target. It does appear a new magnet trendline will form this week. I will revise the targets upon a signal and 1-2 weeks of ensuing action. Stop was hit today regardless of theoretical or actual data. Now flat Trany. 3.12.01: Looking like my stop took me out of a really good short position last week. Magnet signal indicators rolling over and are quite likely to fail to give a signal in the coming 2 weeks. 2500 area is right to the forefront here. 3.13.01: Short term indicators set up to fire buy signal. May get a chance to get back on this train south in the 2800s. I will buy low 2500's if we get there tomorrow. Otherwise, no updates. ht Mag