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Strategies & Market Trends : Trading with Jerry Olson(OJ) -- Ignore unavailable to you. Want to Upgrade?

To: Jerry Olson who wrote (1308)	12/21/2003 2:11:39 PM
From: Jerry Olson	Read Replies (1) \| Respond to of 1617

my newsletter form 2 weeks ago ============================================================ JERRY OLSON'S "POINT" OF VIEW NEWSLETTER DATED DEC 7TH 2003 "SECTOR ROTATION AT IT'S BEST" Hello out there all my cybertrading friends. Gee whiz it's bitter cold here. My wife made me take her out shopping for the holidays after we got snow plowed out from 10 inches of snow? I did not like this one bit<vbg>...either the snow or dragging me to the malls..heh heh heh. I need some sun fun and surf soon. Come on Feb hurry will ya? Ok let's get deadly serious here folks. I did some back testing of the SPZ3's and the NQZ3's too. I wanted to see at every top area how far we came back down off those tops, all the way from the August lows. While I do this below it's very telling for all of us to place the 2 futures structure squarely in our minds eye. First we'll do the SPZ3, or as we call them the e-mini futures. From the Oct lows thru the recent Dec top, let's follow what happened exactly. This index had mucho trouble at 1060 three times, and each time sellers appeared to knock it back down again. It broke a triple bottom at 1040 and touched an "important" number at 1032, rallied back up and then did a solid retest that HELD at 1032 later in NOV. I called for the index to breakout at 1064 above that heavy overhead resistance area at the old 1060 triple top and sure enough thats exactly what it did in early DEC it just touched 1072 the 52 week high last week! Got this folks this is since the Oct lows I could have gone all the way back to the March lows but it was redundant. Ok we hit that 52 week high and reversed back down last week to 1060 again, that is the area of the 20 ema on the Daily Candle Chart. This area of a filled gap at 1059/1060 is going to be tough to break. Not impossible and here's why. I looked back from August lows and every time we topped out this index sold off about 40 points from those highs. NEVER more than that amount. 40! POINTS please keep this in your mind. So a 40 point pullback from the top at 1072 is? guess what? 1032!!! DYNAMIC SUPPORT!. Now if we do not get down that far and begin to re-rally back up sooner than that low it means we are "stronger" than we look here. However if we take OUT the low at 1032 then we now know we are WEAKER then we look. I think it's just that simple, and do not have over think this one folks. The number speak VOLUMES for themselves. OK?1056 keeps this index moving lower, 1072 reverses it back up again and 1076 is the new b/o buy signal on P&F.. All of this analysis is using Point and Figure numbers. Pretty amazing inside info huh? Next we'll check the NQZ3, the NAZ futures. Really this is basically the same "looking" chart. Locally we can see it had major trouble taking out 1450 it's been there 3 times and could not muster enough buyers to power up and thru it. However the excellent support area is at 1360 both the double bottom area and the BSL line. Heavy Support there folks. Now backtesting this index shows me it sold of 90 points each time from Aug thru now. If you subtract 90 from 1450, oh no not again!<g> 1360? is this really that simple?, that plausible? All of these successive pullbacks all the way up have been met with major buying, enough to make new 52 week highs each time. We have reversed down 4 boxes and have some near term support at 1400 and then again at 1370-60 area. If this market is rolling over 1360 will NOT hold period! Tech is not looking all that great as we'll discuss below. So I think these orderly moves in this market seems so surprising to me almost like the COMPX when it continues to selloff 120 points each time. Hey it's down right spooky. I cannot tell you at during time frame to sell all your longs or buy everything in sight. So we will continue to do what brung us to this dance, we will daytrade and scalp. There is some major sector rotation going on here and some of it is very negative for the markets overall picture. Tech is not doing that well like the smokestackers of the DOW 30. The NYSE BP is still very high up here showing little signs of moving down. It would take a major crash for that to occur. I cannot not see that during the next 3-4 weeks. IN fact this selloff is getting well into the most bullish window time frame of all. After Funds rotate in and out of stocks before the end of the month and tax loss sales are taken out as well that low would be the best time to go long. We'll wait carefully and not "anticipate", those that rush too fast lose large amounts of money, when and if that event actually shows up we'll be ready for it. Oh trust me it will show up. The big investors cannot help themselves as they trip all over each other throwing large amounts of money at the markets, like in 2 billion shares in 1 day with a better than 2% move in the indexes, thats their foot print. So for all of us right here and now, we are in limbo land. I do not need to remind us that preservation of our trading capital is of the utmost. Without money we are all done. I feel we are very fortunate to be trading as well as we have been for months on end, and we'll continue to scalp trade here in these volatile times I wrote about last couple of weeks. It's going to get much worse.(the volitility i mean) I can say that the real surprise has been that so many corps are raising targets here during the last few weeks of the quarter. You can see how everything has been priced into the Semiconductors as they sold off very hard last week despite solid numbers. However I noticed that the Bio Tech sector is looking very nice here. Hence we can take some limited risks on the long side as the bios get back into the game. More on this as we move thru the newsletter. ================================================================================================ OK WE ARE IN THE WEEK BEFORE OPTIONS EXPIRATION AND THE TURN OVER OF THE FUTURES. THE FOMC MEETING IS TUES AND THEIR ANSWER IS AT 2:15 EST THAT DATE. NO CHANGE IN RATES AND I WOULD BE SHOCKED IF THEY CHANGED THEIR BIAS IN "ANY" WAY TO SPOOK THE MARKETS IN THESE VERY FRAGILE TIMES..OUT RECOVERY IS OBVIOUSLY ON THE WAY UP BUT MOVING AT A SNAILS PACE..THEIR "KEEPING INTEREST RATES LOW FOR A LONG TIME" WILL SPARK A RALLY FOR SURE AS THE STREET IS CONCERNED THEY ARE STILL WORRIED ABOUT INFLATION? INFLATION? I DOUBT IT. LET'S CHECK THE INDEXES HERE. DJIA---OH WELL, AH ALRIGHTY, OK UH HUH! THE DOW IS JUST A MONSTER IN EVERY SINGLE WAY. THERE'S NO LET UP IN THIS INDEX. IT'S GIVEN 4 CONSECUTIVE BUY SIGNALS EACH AND EVERY TIME IT REVERSED DOWN ABOUT 300 POINTS, GEEZ WHIZ ANOTHER NUMBER? THE LAST ONE AT 9600. WE TOPPED OUT AT 9900+ LAST WEEK. 10K IS THE B/O BUY SIGNAL ON THE DOW. 9500 IS THE BREAKDOWN AREA AND IT WOULD BE A SIMPLE SHAKEOUT PATTERN ON P&F. THE 20 EMA IS AT 9794 THE 3 BOX REVERSAL BACK DOWN IS AT 9750. THE NYSE BP IS AT 81.87 A TICK OFF THE 52 WEEK HIGHS AT 82% RIGHT HERE AND RIGHT NOW! COMPX---WELL WE TOUCHED 2000 LAST WEEK AND PROMPTLY SOLD OFF AS EXPECTED. WE ARE SITTING ON THE 20 EMA DCC CHART RIGHT HERE. NOW WHAT'S A BIT TROUBLING TO ME IS THE DOJI HAMMER THURS THAT WAS TAKEN OUT ON FRIDAY A NEGATIVE EVENT FOR THE FIRST TIME ON THIS CHART. A BREAK OF 1920 IS NOT GOOD HERE FOLKS. AND THE 3 BOX REVERSAL BACK UP IS AT 1970. THE OTC BP IS AT 70.49 IT'S IN X'S AND WOULD REVERSE BACK DOWN AT 68%. WE'LL BE WATCHING ALL THE WAY. SOX---TOPPED OUT AT 535 IN A FABULOUS MOVE UP OFF THE RECENT LOWS AT 495. WELL HERE IT IS AGAIN AND LOOKING WEAKER TO ME AT THIS POINT. WE ARE AT THE UPTRENDLINE SINCE THE AUG LOWS AT THE 40-50 EMAS. IF WE BREAK 490 WE COULD TEST THE 20 EMA ON THE DCC CHART AT 460 WHICH CORRESPONDS WITH THE BULLISH SUPPORT LINE(BSL) AS WELL. LET ME TELL YOU IF WE GET THERE THE NAZ WILL BE TOAST TOO. NOW HERE'S THE BAD NEWS. I DID NOT GET AN ALERT YET ON THE SEMIS BP BUT WE ARE RIGHT THERE FOR A SELL SIGNAL. WHAT I CALL A "BEAR ALERT" STATUS. THATS GOING TO HAPPEN PROBABLY MONDAY AS .22% IS ALL THATS NEEDED TO PRINT 74%. I'LL BE WATCHING LIKE A HAWK. IT SIMPLE MEANS TO ME THAT AS THIS INDEX WAS RSING MEANING THE SOX, THE BP SMEI WAS FALLING..NEGATIVE DIVERGENCE FOR SURE INTERNALS NOT CONFIRMING THE TOP. NDX---SITTING ON THE 40 EMA DCC CHART AND HAS HIT THE 50% RETRACE OFF THE NOV LOWS AND THE DEC HIGHS. WE DOUBLE TOPPED AT 1450 AND FAILED TO B/O THERE. WE HAVE A CURRENT PRICE AND 4 BOX REV DN AT 1406.91. 1400 KEEPS IT MOVING LOWER, 1440 FROM HERE IS THE 3BXRVUP. BP NDX IS IN X'S AT 73% 68% IS THE REVERSAL DOWN AND IT WOULD MAKE A 2ND LOWER HIGH, VERY NEGATIVE CHART PATTERN FOR ME. ANY BREAK OF 64% IS DEATH FOR THE NDX. BTK---UNREAL, THIS WAS THE WEAKEST LINK FOR MONTHS NOW ACTUALLY LOOKING MUCH BETTER, HEY YOU TELL ME?. BUYERS AND SELLERS OUT THERE IN FORCE. MAYBE TAKING CASH OUT OF SEMIS AND PUTTING IT INTO THE BEATEN DOWN BIOS<G> I LIKE THIS IDEA A LOT. THE CHART OF THE BTK WAS VERY WHIPPY LAST WEEK AS IT BROKE A MAJOR TOP AT 475, THE SOLD OFF AND HIT 465 SO NO BIGGIE THERE. IF YOU CHECK THE DCC CHART YOU CAN DRAW THAT DOWN TREND LINE OFF THE SEPT HIGHS ALL THE WAY DOWN TILL NOW AND SEE THE BREAKOUT UP OF THAT CHART. BP BIO TECHS ARE IN X'S AT 59.03% AND MOVING UP. LET'S WATCH THIS 20 EMA AT 462 ISH. BKX---DOUBLE TOPPED AT 955 REVERSED BACK DOWN TO 940 RIGHT AT THE 20 EMA. THE MIDDLE OF THE 10 WEEK TRADING BAND IS AT 930 THE DOUBLE BOTTOM AT 920. LET'S SEE IF THIS HELPS OR HINDERS THE DOW. SPX---SOLID CHART HERE EVERYONE. IT BROKE A VERY LARGE SIDEWAYS BASE WHEN IT TOOK OUT THAT 1020 AREA. AS THE SELLERS AT 1010 WENT AWAY QUICKLY ONCE IT BROKE OUT. THIS THING HIT 1070 LAST WEEK? NOT TOO SHABBY FOLKS. THE 3 BOX RVDN IS AT 1040 NOT THE OLD 1030 MARK AS WE ARE MAKING NEW HIGHS AND THE LOWER LINES ARE MOVING UP. LOOK THIS IS EASY. IF WE SHOULD TAKE OUT 1010 AT ANY POINT THEN WE'D BE IN A FULL BLOWN CORRECTION SO WATCH THAT NUMBER IT'S THE REAL "LINE IN THE SAND " FOR ME. THE BP SPX IS AT 81.40 SOLID AS ROCK. SO ALL AND ALL WHAT WE ARE WITNESSING IS SECTOR ROTATION AND BTW IT HAPPENS EVERY YEAR AT THIS TIME. UNDERSTAND THE FUND MANAGERS MUST LOCK IN GAINS..THEN AFTER THEY SELL, GUESS WHAT THEY DO IN JANUARY HUH? YEP YOU GUESSED RIGHT THEY RE BUY EVERYTHING THEY SOLD IN DEC. SMART PEOPLE HUH? I WANT YOU TO STAY FOCUSED HERE AS WE MOVE THRU THE NEXT 3 WEEKS AHEAD OF THE END OF THIS YEAR. IT'S GOING TO BE ROCKY WHIPPY BUT VERY TRADABLE IN "BOTH" DIRECTIONS. I REMIND YOU ALL WE ARE IN A PROLONGED UP TREND TILL I SAY DIFFERENTLY. LET'S WATCH HOW EACH SECTOR HOLDS UP HERE THRU THE NEXT FEW WEEKS... ================================================================================================ WHILE ALL THE SEMIS ARE GUIDING HIGHER AND HIGHER THE STREET IS SELLING INTO THIS NEWS. I CAN BET ALL YOU WANT THEY'LL BE BUYING IT VERY SOON. JUST LET THE PRICES GET A BIT CHEAPER HUH<g> THE ONLY FOCUS FOR US THIS WEEK IS THE FED AND A HOST OF ECO REPORTS. THINK ABOUT THE WEEK BEFORE OP EX, WE'LL TALK ABOUT IT IN THE ROOM. BELOW IS THE CORPS WITH MID QUARTER UPDATES. ================================================================================================ Close Window Live In Play 05-Dec-03 15:46 Next Week's Events Monday (12/8): Microchip Technology holds its annual shareholder's meeting while Texas Instruments hosts its Q4 mid-quarter financial update (5:30 p.m. EST)... Tuesday (12/9): Hewlett-Packard holds its security analyst meeting (8:00 a.m.-12:30 p.m. EST) followed by Merck's 2003 Annual Business Briefing (9:00 a.m. EST), BEA Systems Financial Analyst Day, NetScreen Technologies' analyst meeting (11:00 a.m.-4:00 p.m. EST) and Cisco Systems Inc.'s Worldwide Analyst Conference, which begins at 7:00 p.m. and goes through Dec. 11... Wednesday (12/10): Kroll Inc.'s Investor Day (8:30 a.m.-12:30 p.m.) precedes Unisys Corp's 2003 financial analyst meeting (1:30 p.m. EST) and TriQuint Semiconductor's Q4 mid-quarter financial update (5:00 p.m.). For a calendar of upcoming events such as Analyst Meetings and Industry Conferences, see Briefing.com's Events Calendar. And for a more detailed look at what else is coming up next week, see Briefing.com's Looking Ahead. ================================================================================================ OK LET'S CHECK OUT OUR WATCH LIST FOR THIS UPCOMING WEEK, THEY CANNOT IGNORE ALL THIS GOOD NEWS COMING FROM ALL THE SEMIS FOLKS FOR TOO MUCH LONGER. WE'LL SEE IF THEY CAN POP FOR A BACKSIDE BOUNCE... SMH---WELL WELL KEMO SABIE WE FINALLY GOT THAT 3 BOX REVERSAL BACK DOWN FROM THE MARCH LOWS? HOLY MOLY CAPT MARVEL. BROKE A RISING WEDGE TOO THATS NEGATIVE HERE. 41.55 THE BTL---40.75 THE SST AMZN---THIS CHART HAS MADE 3 CONSECUTIVE LOWER TOPS NOW IT JUST REVERSED BACK DOWN LAST WEEK. IT'S NEGATIVE FOR A LONG..LOOKS BETTER AS A SHORT. LET'S WATCH THE 3 AMIGO'S YHOO & EBAY TOO. 52.10 THE BTL---50.95 THE SS--- CYMI---COULD NOT BREAK 49-- 4 TIMES...I GUESS THEY DON'T LIKE IT THERE<G>...SITTING AT MAJOR LEAGUE SUPPORT HERE AT 43. IF IT BREAKS THIS AREA IT'S DOA. 43.55 THE BTL---42.50 THE SST...COULD BOUNCE HERE. EBAY---HAS TREMENDOUS SUPPORT AT 50-51 AREA SINCE SEPT. RETESTED IN LATE NOV PULLBACK.THERE'S A DOWN TREND LINE FROM THE OCT DOJI TOP A GRAVESTONE DOJI THAT HAS CASCADED IT LOWER AND LOWER SINCE THEN. IT'S STILL TRYING TO B/O HERE..UNREAL...56.50 THE BTL---55.30 THE SST. BREAKS OUT OVER 57+ IMCL---STOCK IS IN THE BIO TECH SECTOR WITH A SOLID CHART RIGHT NOW. I AM LONG AND WILL HOLD. 41.70 THE BTL---40.85 THE SST. KLIC---VERY OVERSOLD SHORT TERM I'M LOOKING FOR A BACKSIDE BOUNCE TO THE 20 EMA DCC TO 15.50. THE CCI READING IS AT EXTREMES HERE AT MINUS 253 AND BOTH INTERNAL OSCILLATORS INSIDE THE ADX ARE TOUCHING LOOKING FOR A BOUNCE THERE TOO. 14.65 THE BTL---13.95 THE SST MERQ---EVEN WITH THE UPGRADE LAST FRIDAY AND AFTER TRADING IT WELL, LOOKING AT THE CHART IT LOOKS LIKE IT WANTS TO ROLL OVER AND DOWN HERE. 47.25 THE BTL---46.15 THE SST--REALLY NEEDS TO TAKE OUT 48.50 FOR THE NEXT MOVE UP. NVLS---STILL MOVING LOWER OFF THAT WONDERFUL RUN UP AND BREAKOUT. DCC CHART IS IN A DESECDING CHANNEL HERE WE ARE TOUCHING THE LOWER BOUNDARY. 41.25 THE BTL---40.25 THE SST OVTI---BOUNCED OFF SOLID SUPPORT AT 59 REV UP 3 BOXES. HEADSUP HERE ANY BREAKDOWN AT 58 IS A MAJOR SHORT THERE WATCH FOR ANY WEAKNESS. SITTING AT THE 20 EMA FIRST THOUGH. 62.10 THE BTL---60.95 THE SST RMBS---SOLID CHART SO FAR IN A BULL FLAG FORMATION ON THE DAILY CANDLE CHART. 29.80 THE BTL---28.80 THE SST SINA---CONTINUES TO BE WEAK HERE MAKING LOWER HIGHS AND LOWER LOWS. 33.55 THE BTL---32.40 THE SST. SLAB---MAJOR HEAD AND SHOULDERS FORMATION ON THE DCC CHART IT'S MOVING LOWER AND LOWER HERE. 38 WILL BE MY DOWNSIDE TARGET IF IT CAN'T TAKE OUT 49 SOON. 44.60 THE BTL---43.45 THE SST. UTSI---LOOKS LIKE IT'S TRYING TO ATTAIN SOME TRACTION HERE. SITTING JUST ABOVE THE 20 EMA DCC CHART. 37.65 BTL---36.60 THE SST. YHOO---OK WELL WE HAD A NEAR BILLZARD OVER THE WEEKEND IN THE WHOLE NORTHEAST..NOT GOOD FOR SHOPPERS RIGHT? MAYBE MALL SHOPPERS BUT ONLINE SALES MUST HAVE EXPLODED RIGHT? YHOO ANYONE.. IT;S THE BEST OUT THERE BUT EBAY COULD GUIDE UP TOO... 43.35 THE BTL---42.30 THE SST. NSM---BROKE OUT AT 45 AND REVERSED DOWN AHEAD OF EPS LAST WEEK THAT WAS VERY SOLID. SITTING RIGHT ON SUPPORT HERE. 42.55 THE BTL---40.65 THE SST TXN---MOVING LOWER AHEAD OF MID QUARTER CC ON MONDAY, BET THYY GUIDE UP LARGE..I LIKE IT LONG MARKET WILLING. 28.80 THE BTL---27.90 THE SST. HPQ---SITTING HERE ON THE 20 EMA DCC CHART WITH MID QUARTER THIS WEEK AHEAD...23 MAJOR O/H R THERE'S A TRIPLE TOP AT 23 ANY BREAK OF THAT IS BIG...22.50 THE BTL---21.80 THE SST MCHP---MAJOR PULLBACK AHEAD OF THEIR MID QUARTER REPORT 3 BLACK CROWS LOOKS LIKE TO ME. BUT ONLY A 3 BOXER ON P&F CHARTS INTERESTING. 33.00 THE BTL---31.90 THE SST....31 IS TROUBLE BUT THE CHART LOOKS FINE? QLTI---BEAUTIFUL BIO TECH CHART FOLKS HAVE NOT CHANGED MY MIND HERE IF YOU HAVE SOME MONEY TO PLAY IT LONG USING OPTIONS. MAYBE 3-6 MONTHS OUT LATER THIS MONTH OR LEG INTO 1/2 THIS WEEK. 19.25 THE BTL---18.45 THE SST ADI---HOLDING THE UP TREND LINE SO FAR IT'S BOUNCED EACH TIME IT'S VISITED THIS LINE..WILL IT HOLD NOW? 47.65 THE BTL---46.60 THE SST. ============================================================================================= HERE'S THE WEEKS ECONOMIC REPORTS.. Economic Releases Link to more details. Indicator Date Time Estimate Previous Country Wholesale Inventories (Oct) 12/09/2003 10:00AM 0.1% 0.4% US FOMC Meeting 12/09/2003 2:15PM N/A N/A US Business Inventories (Oct) 12/11/2003 8:30AM 0.1% 0.3% US Export Prices ex-ag. (Nov) 12/11/2003 8:30AM N/A 0.1% US Import Prices ex-oil (Nov) 12/11/2003 8:30AM N/A -0.1% US Initial Claims (12/06) 12/11/2003 8:30AM N/A 365K US Retail Sales (Nov) 12/11/2003 8:30AM 0.5% -0.3% US Retail Sales ex-auto (Nov) 12/11/2003 8:30AM 0.3% 0.2% US FOMC Minutes 12/11/2003 2:00PM N/A N/A US Core PPI (Nov) 12/12/2003 8:30AM 0.0% 0.5% US PPI (Nov) 12/12/2003 8:30AM 0.1% 0.8% US Trade Balance (Oct) 12/12/2003 8:30AM -$41.2B -$41.3B US Mich Sentiment-Prel. (Dec) 12/12/2003 9:45AM 96.4 93.7 US =============================================================================================== OK THATS IT FOR THIS WEEK'S LETTER..FOMC IS THE KEY DATE THIS TUES AT 2:15. PLEASE BE CAREFUL EVERYONE OUT THERE.. The password is........................caution...........oneword...lowercase.. I HAVE A DOCS APPT ON WEDS WITH MY WIFE FOR AN ANNUAL CANCER SCREENING OF OUR SKIN AT AROUND 11-12 AM EST..OTHERWISE I SHOULD BE AROUND MOST OF THIS WEEK.. WE ARE ALL SET FOR OUR XMAS DINNER FOR THE GANG IN NYC, FRIDAY THE 19TH OF DEC RESERVATIONS ARE MADE AT STEAK FRITES 9 EAST 16TH STREET OFF 5TH AVE. THEIR NUMBER IS 212-463-7101 IF YOU NEED IT..PLEASE RSVP WITH ME IN THE NEXT FEW DAYS TO RE CONFIRM YOU'LL BE THERE...THANKS AND LOOK FORWARD TO MEETING YOU ALL. SEE YOU ALL IN THE ROOM WARMEST REGARDS JERRY jerry olson www.buyitbuyitsellitsellit.com jerry.olson@verizon.net

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