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To: Les H who wrote (827)	10/15/2001 12:47:36 PM
From: Les H	Read Replies (1) \| Respond to of 29597

sentiment poll 208.245.238.192

To: Les H who wrote (827)	10/15/2001 10:09:35 PM
From: Les H	Respond to of 29597

Specialist trap What to expect now. October 15, 2001. Ord Oracle. On Friday's commentary, we said, "The reason we went short (the SPY and SPX) is a trading method developed by "Larry Williams" called a "Specialist Trap". This method can be described as "after a sideways trading range from four to 15 days, the market breaks out to a new high. If the market can not hold above the low of the break out day, the market is in deep trouble." To trigger this trade a break of the low by one tick of the break out day is needed. On the current December S&P, this would be a trade below yesterday's low of 1089 (this was Thursday's low)". In Candlestick charting on the December S&P a "Three Gap" has also identified. This candlestick method implies once a third gap appears in a rally, the market is due for a pull back. The first gap appeared between September 21 to 24; the second gap appeared from September 27 to 28 and third gap formed from October 10 to 11. There is over head resistance from the March 22 low near the 1109 level on the December S&P. The S&P are due for a pull back near current levels. An ideal target price for a bottom is the September 21 to 24-gap area down near the 970 level. We are short the SPY at 109.20, with a stop at 110.90. We are also short the SPX at 1091.61. General Electric also was triggered with a "Specialist Trap" sell signal on Friday. We hold the GE November 35 puts at 1.30. The NDX "5 day ARMS" has been in the bearish camp for 5 days with readings below 4.00 going into Friday. Today's reading passed into the neutral position, closing at 4.36. In the past, readings near 3.50 have come near short-term tops. The bearish "Specialist Trap" was not triggered on the NDX. However, a bearish "Hanging Man" appeared on Friday. This bearish "Hanging Man" candlestick pattern hit a new short term high on lighter volume and is another bearish sign. They're where couple of big volume days on wide price spread during the rally phase form the September 21 low. These days are called "Signs of Strength" days and implies the bigger trend is up. No new trades on the NDX for the moment. The XAU may consolidate to the first part of November before the strongest part of the up-move begins and that up-move may last into next year. We were hoping the rally would start in October. Still, most gold stocks are making higher highs on increased volume and remains in a bullish up-trend. Our upside target on the XAU is still 95 minimum. marketweb.com