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Strategies & Market Trends : Classic TA Workplace -- Ignore unavailable to you. Want to Upgrade?

To: AllansAlias who wrote (5707)	6/24/2001 7:44:57 PM
From: AllansAlias	Read Replies (2) \| Respond to of 209892

Obviously, the Fed rate cut argues against an early turd. The odds normally favour the market holding into the meeting. As we know, it would typically grind up into the meeting. Still, I'm not going long for anything other than a scalp. Can't shake the feeling of impending down. A rally would be fine too, as it would be so shortable. Just imagine, the rate cuts, the final solution, will at last be out of the way. In the wider scheme of things, we will not long have to tolerate this talk of a new bull new leaders summer rally the bottom is in the worst is over don't fight the fed cash on the sidelines add quality on the dips bears have had their day ...and so on as ever before

To: AllansAlias who wrote (5707)	6/25/2001 12:29:38 AM
From: UnBelievable	Read Replies (1) \| Respond to of 209892

Security Trader - Weekly Commentary for June 24, 2001 5 weeks ago we suggested that all the short term point & figure indicators were at their highest levels in at least 3 years and that when everyone has bought........there just ain't too many people left to buy, unless the people that were fearful of the y2k computer crisis ran out of canned food and came out of their bomb shelters. Last week the OTC Bullish Percent (longer term indicator for tech stocks) turned to a sell signal and this week the NYSE Bullish Percent (longer term indicator for the OLD Economy stocks) turned over and is now on a SELL signal as well. This is not rocket science stuff here, its pure and simple supply and demand. When demand exceeds supply for a specific item, prices go up........when supply exceeds demand, prices go down. Don't make it more complicated than that. Its similar to trading stocks using charts......if your stock has rallied to a resistance level and starts putting in lower highs and then penetrates the support between the lower highs....what's it mean ? It means that the supply is starting to exceed the demand. If the stock you own has penetrated support......think about it, that support was previously established by buyers at that level OR by shorts that bought there thinking that they had made enough profits. IF that support fails...well logically, the buyers that were there before are gone.....and the shorts that had previously taken profits at that level gain a little more confidence and hang around a little longer and even short more stock. Think of the market as buyers and sellers.....not as INTEL, CISCO or Microsoft. The market has been and likely will continue to be a traders market for quite some time....there is no reason to get emotionally attached to a stock. With this in mind, think HARD about supports and resistance, think of them as emotional thresholds......if a stock has bounced around support 2 or 3 times and then finally penetrates that support......what's it mean LITERALLY ? It means that there were people that had simply been accustomed to buying a stock at a certain level and when it reaches that level, they buy again. If this support is broken......its a RED FLAG to them and they 1) quit buying at that level and 2) might even start unloading or taking some of their position off the table and 3) penetration of a support level gets the attention of short sellers which adds gas to the fire. So, I guess i am saying....do not think of the market only from the BUY side.....think of it from the SELL side as well. When a stock is taking, don't think of it as...oh, those longs must really be hurting.......think of it as, is there enough downside possibility for me to take a short ? OR, where is the next support level where there have been buyers before AND where those who are short are likely to take profits. Oops, guess a got a bit odd subject above....nonetheless, its exactly how one must think of the market.......its only 2 dimensional.....you can either be short OR you can be long. I am no advocating that you must become a short seller to make money in this market.....I am simply advocating that you MUST allow yourself to think about both sides (shorts and longs) of the market. Now that all of the point & figure indicators (long and short term) have the RED FLAG up it means the entire market is susceptible to a pullback We have made many suggestions over the past couple of weeks....but here they are again, some are pro-active and some are reactive: 1) WAIT until the short term point & figure indicators to bottom out and return to BUY signals, this means put a shopping list together, throw a few things in the cart....but don't go through the checkout lane yet. 2) EXAMINE your long positions....establish a stop loss....if your stock is not jumping off support like you would YANK your finger off a HOT stove top...well, you get the message ! 3) If your stops are hit on your stocks....move to the sidelines or hedge the position by selling part or all of your position.....or sell calls against your position....or buy protective puts. 4) Consider taking some shorts in your portfolio to hedge your longs. In Summary.......all of the short and long term point & figure indicators are on SELL signals. This is a RED FLAG....its like coming to a stop light that's RED. You don't proceed through with caution.....you WAIT until it turns back green. Should the short term indicators return to the OVERSOLD area (less than 30%) like earlier this year, then that would certainly be a good spot to pull your shopping cart up to the checkout lane and start checking a few things out. Be a smart shopper....when the RED FLAG goes up, it means the supply in the market has temporarily exceeded the demand and buying under those circumstances is like swimming up stream and we all know its easier to swim WITH the stream / trend than against it.