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Strategies & Market Trends : Tech Stock Options -- Ignore unavailable to you. Want to Upgrade?

To: Tom Trader who wrote (28086)	11/10/1997 7:29:00 AM
From: donald sew	Respond to of 58727

Tom, It is very hard to determine if the market hit higher highs or lower lows on a very short term basis. It could be argued that we did hit higher highs, although many would say not since we did not get back immediately to the 7900 range. For example, on the Thursday after the big drop we pulled back over 100 DOW points but there after we clearly went right buy it to the upside. Frankly, I would not use that as a clear indication that we are set a new high on a one day basis. It also need to be kept in mind that one may be assuming that due last Fridays performance, we just started to head down again - what happens if that was just a dip in the market's attempt to set higher highs. No need to tell you that the market does not move straight up or down. It also needs to be kept in mind the huge quick rebound of approx 750 DOW points from the lows of 6950. As for lower lows, the last valley on the DOW was at 7381 on 10/30. My technicals are not indicating that we will get that low this cycle. The reason I say that is that 2 indexes are already very close to CLASS 1 BUYS, the SOX and the RUT. If and when the DOW hits 7500 they should be CLASS 1's. I also calculated that at approx 7400 basicly the whole market will be a CLASS 1 buy per my technicals. Also, per last Fridays data, there were 2 signals (medium strength) that indicated that we may reverse straight from here, and overall the probability factors I developed are only slightly in favor of the market continuing to dip today. I quantified the probability at 3:5 that the market will continue to drop - not that strong. Basicly its a flip of the coin. I cannot establish a firm direction right now. If you are playing puts, be cautious and nimble. I realise that I am in a contrarian position in regards to what many of the big boys are saying. Remember that my TA does NOT include news or fundamentals, so hypothetically if SADDAM does something really stupid like pull the trigger or some other tramatic news comes out, such will pressure the market downwards over and above the technicals. But then again that playing the news, and I will allow others more knowledgable than I in that area to comment. If today the support lines I established at 7575 and 7510 holds again, such will just add to the strength of the current market, although slightly. Again, I am not a bull or bear or contraian. I am now on the sidelines with cash and for selfish reasons I want the market to drop to the 7300-7400 range so I can buy back in with much confidence based on my technicals. Unfortunately, my technicals are hinting that my chances of seeing such are getting less and less. Good luck