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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Return to Sender who wrote (40115)	8/23/2003 2:36:36 PM
From: Gary Martin	Read Replies (1) \| Respond to of 69260

Thanks for the summary of turning points in August. I recall some of those days quite well! After the close yesterday, some of us are wondering if we are seeing the failure we've been expecting in this year's rally? I'm trying not to be overly influenced by the bearish expectations I've had for sometime, but doesn't such a technical failure day raise the alarm that we are at or near a Major Top? Of course, it is all guesswork, but does anyone else feel the rationale is strong enough to warrant buying some speculative (or protective) puts soon? Since the S&P index didn't run to new highs as the Dow and Nasd 100 did, would it (or the OEX) be the short position of choice if one was to place buy index puts? Gary

To: Return to Sender who wrote (40115)	8/26/2003 3:38:21 AM
From: Johnny Canuck	Respond to of 69260

Tradewinds by Chris Curran August 26, 2003 The September S&P futures (SPU and ESU) opened Monday's session with a -1.00 point gap to the downside. The open was fairly quiet as the futures quickly closed the gap and then got some follow-through selling from Friday. A report at 10 am ET that Existing Home Sales were higher than the consensus created some brief whipsaws that were a prelude to a very slowwwwwwwwww grind for the majority of the session. The futures were headed for their narrowest-range day of the year before an unimpressive late push put the contract at the overnight Globex high and at the best levels of the session . All I can say is that on days like Monday, it's very important to remember that not trading is, in itself, a position. The entire day had that "no real buyers and no real sellers" feel to it. The September S&P 500 futures closed Monday's session with a gain of +1.25 points, and finished in the top 1/3 of its daily range. Volume in the September ES was estimated at 377,000 contracts, which was well off Friday's pace and well below average. On a daily basis, the contract was able to hold its 50-day MA and its previously broken downtrend line, and avoided confirming Friday's reversal. On an intraday basis the ES has formed a long 60-min bear flag that will tell the rest of the story on Tuesday. The "pole" gives it a target in the 970 area while a reversal back up puts resistance at Friday's broken trendline (see chart). Tuesday's session may show some signs of life after the Durable Goods report at 8:30 am ET, with a consensus of 1.0%, and Consumer Confidence at 10 am ET with a consensus of 79.6. I was reading through one of the first technical analysis books that I received in the late 80's, and although it's describing the markets then, the "theme" of it still rings true, especially in today's market. This is from the book "Timing the Market" by Weiss Research: Stretched out before you are the widest diversity of markets, with the most powerful leverage and the greatest opportunities - or dangers - in all economic history. You are both bewildered and fascinated by the speed of change and the plethora of technical indicators used to track that change. However, before you can move into this new, often unchartered territory, you come to a series of crossroads, where you must make some basic decisions regarding how you will approach the markets in general. At the first crossroads, you are confronted by a stranger who asks you, "Do you want to be a picker or a follower?" "What do you mean?" "The pickers are all those that try to pick a bottom or a top. They say that they have technical tools which will predict the next market turn, help them get in before it really makes its move, and get out before it heads back in the other direction. For lack of a better term, we call them bottom-pickers and top-pickers. But more often than not, they're the ones who, in effect, get picked off.... like flies. Every time there's the slightest rally or correction, you can hear them shouting 'this is it! Now's the time to buy (or sell).' Granted, there are some who do make money, but for the most part they suffer from what we call ICGAL syndrome - that die-hard belief that It Can't Go Any Lower." The stranger points towards the horizon. "See over there. That's where you'll find the ceremonial burial ground of the thousands of would-be traders who literally got killed trying to pick 'the bottom' or 'the top.'" "The followers use a somewhat more conservative approach. Rather than trying to catch the entire move, from top to bottom, their brand of analysis is designed to give confirmation that the market is indeed trending in one direction or another. Then, and only, then do they jump on board. They are the trend followers." Just some food for thought.

To: Return to Sender who wrote (40115)	8/26/2003 3:54:20 AM
From: Johnny Canuck	Read Replies (2) \| Respond to of 69260

September will prove to be decisive for the next few months. Everyone is sniffing for signs of a turn. I don't think anyone knows which way the break will come. We have: Pro: 1) Semi Fab utilization rates at 85 percent 2) Consumer with record free cash flow due to low mortgage rates 2) Bush and the republicans willing do anything short of selling their souls to get the economy moving in advance of the election next year 3) Intel suggesting an uptick in consumer PC demand and some small business demand 4) Low estimed EPS numbers as most companies will be effected by the seasonal shut down in Europe Con: 1) Still no sign that big business demand is picking up 2) More muted demand coming out of Asia 3) Consumer debt increasing 4) Slight uptick in consumer bankruptcies I think the key is to continue to focus on short term trading or stand aside or trade the break in September once the street comes back. Remember the first few days back after labour day will be a head fake. I think there is a real danger trying to predict the market direction too far out right now. Short term I am just looking for a Fib re-trace of the move from 1640 to 1812. We got the 32 percent re-trace today. Now looking for a bounce and a possible test of the 0.6812 level at 1694.