Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Lee Lichterman III who wrote (5777)	4/14/2001 10:11:04 AM
From: Lee Lichterman III	Read Replies (1) \| Respond to of 52237

By L3_Aka_L3 on Saturday, April 14, 2001 - 06:55 am: Edit In one of my earlier posts I said I would be exiting no matter what on my longs on Monday. I have reserved the right to change my mind once again. -ggg- Studying the charts this weekend thus far, I am seeing some short term bullish developements.... MACD is crossing upward and making some higher highs on key issues and some indexes. Same with stochastic signals for both short term and medium term. The long term stochastics have been extremely oversold and are curling upwards finally after many months of steady declines. Some smaller but what I consider key issues are making slightly higher highs. As Don pointed out, we have broken above the short term downward trendline in the NDX. IMPORTANT - Thus far, it appears I have a negated signal on my High Low indicator which is EXTREMELY Rare! This hints at an extended run/rally. ADX still has room to run on the NDX and some indexes as well as key stocks. Because of this, rather than selling my longs, I may just buy a few more protective puts and let my longs ride. If I buy long term LEAP puts, chances are they can still make money on a retest further down the road, allow me to ride my longs until a better top is reached while still protecting me against a down gap on bad earnings or economic data. I am a bit worried still at all the stocks at resistance like JNPR, EMLX etc and realize that there is a lot of resistance on some of the indexes as well in this area. The NDX is close to the 1750 line and the 2000 area before the final 2200 line that I expect to hold. My other bearish concern is max pain on the QQQ and a few others that already have price over max pain levels. Still there are a few possibilities that allow for this. Gersh a long time ago came up with an interesting concept. What if the big money at times WANTS to be called out on stock. Selling calls and allowing them to be called on expiration enables the selling of a large lot of stock all of which occurs off the board. Expiration call outs occur on Saturday and there is no reported transactions. Millions of shares change hands and no one is able to tell who lost a bunch of stock. Assuming the MMs/broker houses load up on stock near the bottom and/or build inventory over the last couple weeks as shorts are covered and the rally progressed, the calls are covered with this stock and then next Friday, the calls are in the money. That Saturday, all that stock is transfered to the holders of the calls, the pits and houses are net flat again and ready to go where ever the market flows form that point on. They can short, go long whatever from there. They just dumped hoardes of inventory and no one knows how much they just dumped off their books. The other clue is as I pointed out earlier this week when I noticed a bunch of big buys in calls. I doubt any of us were the ones buying 2000 contract blocks of QQQ 48 calls etc Monday. SOmeone knew something and it wasn't a little guy. Of course all this is just conjecture and they could just be running it up prior to expiration so that when/if INTC or MSFT blows it, they have enough cushion to have a drop and still be near the 40 strike max pain level versus if we were around 40 now and then INTC or MSFT dragged us down 5 or more points before Friday. Anyway, I have said many times that if I just mellowed myself out and traded less, followed my weekly signals instead of my daily charts, I would have made more money each year. Right now those charts are saying to be long and I am going to try and hang as long as I can with those signals. To be honestI am not sure what I will do next week. I will likely buy those puts, ride at least some of my longs as long as possible and then go with the flow. I am thinking we will pull back some but how much is unsure and the charts are hinting it won't be a significant move with another upwave to follow. I know my style and I hate to chase so by hedging, I am allowing myself to stay in and just hedge my bets a bit. I still think that the indexes will revisit lows later this year and likely break them. I only found one instance where we made a permanent low on a pattern like we just completed. All other times, we retested or made new lows. I have too much that is saying that the 2200 NDX area is a likely target for this move so I would like to get as much of the move as possible before switching back to the dark side and going net short. FA is still bad but we need to squeeze some of the amature shorts and allow the big boys to reload at higher prices for the next wave down. The commercial traders were not net long yet so I doubt this will stay up. They move slow and will be long a while before the real and permant bottom is in IMO. So far, that hasn't happened. The question is will this be a pop, drop, rally; a pop form the right shoulder of the H&S with only a minor pullback and then rocket up to 2200 NDX or will this just die now that IRA money flow has stopped and we head south? I am thinking scenario 2 but won't rule out one. I think the third scenario is a rare chance occurance right now. Too many are shorting this on the way up so I think we can head up a bit more and longer before we head south again. One subjective clue is the reaction to misses and warnings last week. WMT warned and only dropped a couple. NTAP warned and closed positive on the day. JNPR basically warned for next quarter and moved up strong. The semis and QCOM look like crud on FA yet they are either rallying strong or holding thus far. We had numerous releases about how capex spending is slowing yet NVLS and AMAT were extremely strong. We are sucking in new sheep before the slaughter. There is still alot of skeptisism and we will need to make this rally last a bit longer before pulling the plug IMO. Look at January, it lasted a few weeks, this one will likely last that long as well. Last, my system gave buy signals almost across the board on 5 April, as of tonight, I only have received a handful of sell signals the past week on stocks like EMC, Q, IP, CA, IFMX, COF, KEA, BEAS, WCOM, OSX, etc. Many are primed for a sell but I have not received a signal yet despite them being overbought. Until then I tend to be leaning up with stops. I am not saying we are clear and safe, the resistance levels are very real so stops need to be pre-identified, stuck to and we have to be ready to play the other side. I just suspect this pullback will be minor and quick before the next leg up resumes. Of course bad news from MSFT or INTC could change all this and make it a post for the idiot posts of the year award. -ggg- Good Luck, Lee