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Strategies & Market Trends : Trader J's Inner Circle -- Ignore unavailable to you. Want to Upgrade?

To: ajtj99 who wrote (45625)	8/9/2001 5:16:42 AM
From: LTK007	Read Replies (1) \| Respond to of 56535

aj said<<clear as in higher levels since we have not spent much time in the 1600-1900 range over the last 3-years>>. that is the key to why 1900 to 1600 range is a a weak support zone is for exactly the reason you state--we have spent very little time there,and the from a bull's view this really is more shaky because those who were pre 1999 buyers who did NOT sell the first time we headed for lows,may,on second time cash out. The single greatest factor that need happen to have capitulation is to have the funds hit by redemptions by people who have been holding for 10years or more---funds can't hold up a market when redemption calls get too heavy. we are objectively in a high stress zone below 1924. The talking heads will increase to a scream level that buy and hold until you are near dead or dead, is the only way--preaching that investors who sell only get burned. I am hearing of more and more cases of another group that are holding,that be those that bought post 1999,of which many are so under water they can't bear the loss--these are less likely to sell,as they cling to hope desperately--but they are very vulnerable to being forced to sell,however.Max

To: ajtj99 who wrote (45625)	8/9/2001 6:38:29 AM
From: LTK007	Respond to of 56535

aj/all, briefing.com commentary on yesterdays NASD action--they support your 1890 as key support,and that alone(briefing saying this) makes it all the more critical--briefing.com has consistently ALL summer been maintaining a rally is just about to happen,Today they express a tad,just a tad of doubt.<<<Updated: 09-Aug-01 General Commentary Market set up nicely in the morning, as indices shook off Cisco's (CSCO) less-than-stellar earnings report to press narrowly higher by late morning... However, buying dried up by midday and sellers retook control... It was a little alarming how quickly the sector knuckled under, especially since there was no obvious development prompting the reversal... Decline gathered momentum as a) the Nasdaq broke back below 2000 and b) the Fed's Tan Book offered no signs of encouragement on the economy. While no serious technical damage was done to the market yesterday, can't deny that investor sentiment took hit due to yet another failed rally try... Market psychology also undercut by Cisco's comments that business conditions are apt to remain soft for another 3- to 6-months, and by the negative tone of the Tan Book... Traders desperate for more consistent signs that the economy/earnings are levelling off... In absence of such, buyers apparently willing to sit tight and wait. If buyers are going to be spooked off by every negative earnings/economic report, then turnaround will be much slower in coming than expected... i HATE that BS phrase "if buyers are going to be spooked",it isn't being spooked,it's being RATIONAL!--max aside at this relentlessly complacent bull-spinning(end aside) Given that neither the Tan Book nor the Cisco (CSCO) report shed any new light on the economic/earnings picture, Briefing.com admits to being surprised by the magnitude of the market's reaction... It's one thing for indices to drift lower due to investor disappointment, it's quite another to watch them fall like a stone... Nature of yesterday's late decline makes me think it had more to do with utter lack of buying interest than any new found commitment on part of sellers. Buyers need to step up soon, however, or tone could go from short-term neutral to negative... Key support for Nasdaq is in the 1900-1890 area... Meanwhile, would like to see influential SOX index hold above July low of 531... Given proximity to major support, oversold nature of short-term technicals, and rising put/call ratio, we would expect to see indices bounce... However, we expected the rebound to begin yesterday afternoon, so...>>> end quote