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 : Strictly Buy and Sell Set Ups -- Ignore unavailable to you. Want to Upgrade?

To: chowder who wrote (2252)	2/12/2005 4:22:11 PM
From: profile_14	Read Replies (1) \| Respond to of 13449

Thanks dabum3, I appreciate your response. I tend to try to anticipate moves and I did alright on this one so far. Since I closed out my position I will wait to see what the FED brings with the Humphrey Hawkins testimony this coming week (I think it is this week) and what the bond market may bring. It has been on a tear and during the last couple of years there has been a noticeable cyclicality to it which I will play off in the coming weeks. TOL does not really weaken until sometime in March or April, and much of it is dictated by the interest rates. Also, there is an important survey for the housing sector being released this Tuesday which may affect the way stocks move. The set ups are key, as you suggest, but they ignite based on a specific news event, or an excuse to make them go one way or another. That is why I watch for something that is over extended. During the recent pullback, TOL declined much less than the average home building stock. In fact, percentagewise, it declined by about one-half of the rate. Conversely, due to options expiration, there is some pressure to push stocks to close at nice round numbers as to expire as worthless the greatest number of options. TOL options would cause max pain at 80 followed by 75, but the difference in value to 85 is not that great. March is an interesting month as the max pain point is nearer the 65-70 mark, which coincides with your seasonal bond sell off. However, I still believe TOL will test and likely surpass its recent highs, with a split probably being announced when formal earnings are released on the 23rd. That would be the best time to go short, if the stock experiences a serious and rapid blow off into such news, IMHO. What is uneasy about the TOL chart for me is that on a daily basis, it is rising rapidly but steadily. The steadily part is what is uncanny. It needs to accelerate to show true capitulation, IMO. The overvaluation is clear to me as the backlog is gone in a flash if conditions in the markets change significantly, but I would like to see a 8 million share day with 6+ points to the upside. That would tell me shorts got killed and squeezed. Thanks and best regards,