Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: Real Man who wrote (64993)	7/24/2003 12:17:13 PM
From: William H Huebl	Read Replies (1) \| Respond to of 94695

Nice pop this morning, huh!

To: Real Man who wrote (64993)	7/24/2003 8:25:48 PM
From: BubbaFred	Read Replies (1) \| Respond to of 94695

amateur-investors.com Amateur Investors Daily Breakout Report (7/24/03) There were no breakouts today in our Stocks to Watch List. There are some signs that the market could be in trouble in the near term as the Volatility Index (VIX) dropped below 20 today which hasn't occurred in over a year. In my opinion there is too much complacency in the market which may mean we will see an increase in selling pressure. Meanwhile since 1998 there have been four instances where the VIX has generally made a bottom in July or August (points A, B, C and D) which was then followed by a sustained period of selling pressure. Even in 2002 there was a sell off which started in late August (point E) although the VIX only dropped into the mid 20's on this occasion. Thus since 1998 there has been some type of sell off each Summer with four of these events being signaled by a very low reading in the VIX. This is why I'm nervous about the short term direction the market could eventually take. The key level to watch in the S&P 500 is the 960 area which is where a few things are coming into play. The 960 level is the Neckline associated with the previous longer term Inverted Head and Shoulders pattern that the S&P 500 was exhibiting and is where it found support at in early July (point F). In addition the 23.6% Retracement Level calculated from the March low to the mid July high is also near the 960 area as well. Thus it will be critical for the S&P 500 to hold support near the 960 level if more selling pressure occurs in the near term. If the S&P 500 fails to hold support near the 960 area then I would expect a drop back to its next major support area which would be in the 928 to 935 range which coincides with its 38.2% Retracement (928) from the March low to the mid July high and 200 Day EMA (935). At this point with very few charts exhibiting a favorable chart pattern and the extremely low reading in the VIX you have to wonder if a sustained period of selling pressure is just around the corner. Thus if you are in the market I would consider locking in some of your profits if you have them and also make sure to have a Stop Loss strategy in place just in case the selling pressure intensifies in the days ahead. Meanwhile after the close EBAY one of the major market leaders since March got hammered in after hours trading which could spell trouble for the market on Friday. I know this commentary isn't probably something you what to here but I try to look at things realistically and when I see potential trouble brewing it's my job to let investors know about it. Historically from late August into October is a weak period for the market anyway with September being the worst month performance wise. Meanwhile the months of November, December and January typically before much better. Barring any major world developments I still think there is a decent chance we will see another significant move upward before the end of 2003 however we may have to go through a sustained pullback before the next major upward move can occur. In the weeks ahead new stocks may start showing up on the radar screen as Institutional Money begins to rotate out of and into different Industry Groups. The big money on Wall Street can't hide and when certain stocks are acting well while the rest of the market is under selling pressure is a strong signal of who the next market leaders will be. Amateur-Investors.Com