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

To: The Freep who wrote (62545)	1/2/2003 10:59:56 AM
From: skinowski	Read Replies (1) \| Respond to of 209892

Freep, the short answer is, good risk / reward. My entry was pretty good. The market rallied up sharply into the congestion of the last few weeks. There will be a lot of scared long money, hoping to break even. Any weakness just may do it. Absolutely historically high tick may be a good sign of panic buying. Look at the volume on the SPY’s on 5min. The vertical rally is taking place on falling volume. Here is part of a summary by a timer by the name Tim Villano. He is excellent, generally. I have occasional access to his work. >> ...A new line of high-TICK resistance has been drawn in the past two sessions. On Monday, (+917) figure occurred at the (SPX h 882.10) mark. On Tuesday, a more extreme (+1208) figure was recorded with the Cash at (SPX h 881.93). Some TICK watchers consider the 2 extreme readings within a five-point range in a five-day period to be a sell-signal. No extreme low figures occurred on Tuesday as new reaction lows were recorded. The put/call ratio complex revealed little fear on Tuesday as the year-end seems to instill participants with false optimism. Critical ratios all declined with the CBOE equity ratio falling to near market-topping levels (.51). Clients will recall that 2 market-topping levels were recorded in this ratio on Monday, December 23 and Tuesday, December 24. Secondary ratios, which have looked at little better in the past few sessions, also deteriorated slightly. The QQQ ratio was weighted to the call-side (.79). Given the fact that the market has declined for 21 sessions (a Fibonacci timing day) since December 2, this data is not very encouraging. Five-day ARMS Index readings, NYSE (8.9) and NASD (8.22), are in supportive or market-basing territory. This is encouraging given that the SPX and the NASDAQ are between standard 38-50% retracements of the October 10 rally, but other sentiment data does not appear to be confirming these readings. This may be another case, and we have seen many in the past year alone, where such data should not be viewed in isolation. There is really little change in the price outlook presented on Tuesday. A modest push to slightly higher ranges may be possible (SPX 882-886) and (NASD 1340-1348), but the tape is expected to grind lower toward a better test of 50% retracements (SPX 864-854) and (NASD 1325-1310). Micro traders can continue to play for this type of slide. Conservative traders should probably just stay on the sidelines due to supportive ARMS data. Investors should keep equity exposure at defensive 50% levels, hedging the long-side with Gold. While the change in interim posture may be disappointing, it should not be a surprise to clients. We have stated for several months, including during the period following October 10-11, that the Dollar slide could become a factor in the outlook for the stock market. On December 9, we determined that the long-predicted breakdown to new-year lows for the Dollar was in process and backed-off the strongly bullish view of stocks, which was adopted on October 11. The Dollar Index printed at new-year lows on Tuesday, December 17 and has continued to slide to date. Clients may also recall that, on a trading basis, we suggested taking profits following the (+1353) high-TICK of Wednesday, November 27 and even recommended a sell-side trade for December 2. Since that time we have been largely neutral on the short-term outlook for stocks but have traded in and out 2 to 3 times. We have not stated that the short-term correction has ended or that the interim uptrend has resumed. The market currently appears to be in “no man’s land”, what looked to be a standard retracement could be morphing into a deeper test of October levels due to deteriorating sentiment data and intermarket pressures. Nobody said it was easy.<< tradersfocus.com