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To: Les H who wrote (1924)	5/13/2002 4:15:19 PM
From: Les H	Respond to of 29594

Katz aegeancapital.com

To: Les H who wrote (1924)	5/13/2002 7:35:02 PM
From: Les H	Respond to of 29594

What to expect now. May 13, 2002. Ord. On May 7, the S&P bounce off the low set on November 1 near the 1050 level. This condition is called a "Spring". We have the line draw on the graph above with the "Support" heading on it. There is a trading range that developed between 1053 to 1100 area back in mid October to first of November. We think this trading range is the left shoulder of a "Double Head and Shoulder Top". The "Left Shoulder" took about two and half weeks to develop and therefore the right shoulder may take two and half weeks to complete. There is a good possibility the S&P is developing the "Right Shoulder" now. This development may last all of "Expiration Week" and possibly run into next week. The top of the "Right Shoulder" may find resistance near between 1090 to 1100 areas. We will be looking to short the SPX near that level if our short term indicator turn bearish. We will look for a decrease in volume and narrowing of the range on the test of the May 8 high with the "Percent Volume" approaching .60 or higher and the "5 day ARMS" near "5.00" or below. This potential "Double Head and Shoulder Top" has a downside target near the 930 area on the S&P. There is a good chance the NDX will rally back to the resistance zone that starts near 1310 and runs all the way to 1340. There are 5 trend lines coming in this zone and the more trend lines in a given zone the more resistance it has. The trend lines are; April 4, 2001, October 19, 2001, October 30, 2001, February 22, and April 11. Since the NDX fell through these trend lines a good distance; it will provide a "Brick Wall" of resistance the next time up. The rally back up to the 1320 level should find volume decreasing as that resistance is met and the trading range should narrow. There is also resistances at the May 8 high near the 1280 level. That day has huge volume and needs to be tested. If light volume is accompanied on the May 8 re-test then the rally may stall at the May 8 high and we will look to short it there. We are flat for the moment. The Weekly and months charts on the XAU remain bullish. The monthly charts imply Gold is in a powerful "wave 3" up in Elliott Wave terms. The "Rydex Precious metal Fund" assets have reached into the extreme overbought area at the 90 level (recorded on May 10). Therefore, the XAU may have a time out to the upside for a short while. We still like "Drooy" for the longer term (we bought it at 1.04). We like HL for the longer term (we bought it at 1.06 and 1.40). We like ASA for longer term (the previous support is at 23). We are adding a new gold stock that we think have good potential for the long term and that is "BGO". We bought this stock on May 3 at .89. There is good support between .60 to .70 area and plan to add to our position if BGO pulls back to this level. marketweb.com