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Strategies & Market Trends : Playing the QQQQ with Terry and friends. -- Ignore unavailable to you. Want to Upgrade?

To: IHateSourCream who wrote (641)	6/5/2005 10:49:28 PM
From: Walkingshadow	Read Replies (1) \| Respond to of 4814

Hi IHSC, Yes, I have encountered problems finding shares to short. KKD in particular is probably difficult because it is so heavily shorted already---55% of the float! In fact, KKD has one of the highest short ratios I have seen in a long time: it would take a full month worth of trading volume to cover all the shares currently held short! This, by the way, makes KKD a very good potential long position once the bottom is in place, and that may well be happening here: stockcharts.com[w,a]daclyyay[dd][pb50!b200][vc60][iLp14,3,3!La12,26,9]&pref=G 139.142.147.218 As you probably know, that's because when KKD begins to rally, increasing numbers of shorts will get squeezed, and the sheer volume of shorts can fuel quite a strong rally as they cover. The stops will tend to trigger around the even-dollar marks... so here's one stock where it could be very useful to watch the ticker as it approaches the even dollar marks where shorts' stops are likely sitting. You'd be looking for a whole lotta green suddenly as the trades go off at the ask. Anyhow, KKD looks to me like it may well be putting in a bottom now. I think I mentioned this in a previous post, not sure.... That doesn't necessarily mean it will rally----it could chop around indefinitely in a sideways trading range----but it DOES mean that KKD makes it to the long watch list, and I'll be looking for signs of increasing relative strength, a trend (up), technical momentum, and volume buying at the lows. Obviously right now KKD is overbought with technical sell signals in place, so a long position now would not be wise. But a potential reversal point would be the 50 sma below. There are definite signs of bullish divergence in the technicals now; look particularly at this weekly chart: 139.142.147.218 T

To: IHateSourCream who wrote (641)	6/5/2005 11:25:14 PM
From: Walkingshadow	Read Replies (1) \| Respond to of 4814

RE QQQQ: The weekly chart shows a decidedly bearish candle from overbought territory at the upper BB rail, with early sell signals (OBV and Williams): 139.142.147.218 Using a fast stochastic setting, a sell signal looks imminent, and note also that QQQQ is at the upper regression channel rail: 139.142.147.218 The major moving averages are now modestly upsloping; the first one below is the 200 sma, which currently sits at $36.89. Not far below that is the 50 sma, currently at $36.35. Both represent support levels, and so potential reversal points. stockcharts.com[w,a]daclyyay[dd][pb50!b200!f][vc60][iLg!Lp14,3,3]&pref=G The BBs are now extremely expanded, and need to contract. Note on this chart also that the middle of the BBs sits at $37.23, which is not far above the 200 sma at $36.89: stockcharts.com[w,a]daclyyay[dd][pb200!d20,2!f][vc60][iLg!Lyb20,2.0]&pref=G I see significant chart support at about $36.70: stockcharts.com[w,a]daclyyay[dd][pb20!a36.70!f][vc60][iLg!Lyb20,2.0]&pref=G On the weekly chart, this level also coincides with the 20 sma: stockcharts.com[w,a]waclyyay[de][pb20!a36.70][vc60][iLg!Lyb20,2.0]&pref=G The middle of the medium-term regression channel sits just below $36 and is dropping gradually; this point also represents support: 139.142.147.218 So.... my read from just the charts and technicals tells me QQQQ is headed down. Support levels I see from top to bottom are: Middle of the BBs: $37.23 Chart support: $37.00 200 sma:$36.89 Chart support: $36.70 50 sma: $36.35 Chart support: $36.00 Middle of the regression channel (medium-term): about $35.85 Lower BB rail: $35.27 (and sharply rising) I think QQQQ will drop down at least to chart support at $36.70, and may well fail at that test and go on to test the 50 sma. If the 50 sma doesn't hold, then we are looking at a test at $36.00, then the middle of the regression channel just below, then the lower BB rail, which should rise quite a bit by then if this scenario pans out. I think the chances we'll test these lower levels are very remote, but we'll have to see how the volumes develop as QQQQ trades down. T