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

To: kiwi who wrote (34585)	2/3/1998 12:48:00 AM
From: donald sew	Respond to of 58727

Kiwi, The OSX was not a CLASS 1 BUY, but I still decided to get in on the basis of Crude oil price increasing and if the overall market does pullback with some profit taking, they will be searching for good values. Seeya

To: kiwi who wrote (34585)	2/3/1998 9:22:00 AM
From: donald sew	Read Replies (2) \| Respond to of 58727

INDEX UPDATE ------------------------------- For the short-term the technicals are strongly overbought and many of the the indexes are either CLASS 1 or CLASS 2 SELLS. If one analyzes the charts, this uptrend actually started at 7450(intraday and include last week's small dip) which is a 650 point gain just in the DOW and for the NAZ it was about a 167 point gain. If one uses a 5 to 1 ratio to compare the NAZ to the DOW, then the NAZ increased about 835 points. Now for the short-term, since some of us are in PUT, how big of a pullback will this be. Frankly, and from a subjective view, dont think it will be much, so for us PUT players I think the best strategy to use Jim's CHICKEN TRADING, or initiate a strangle. Personally I dont like the strangle at this time since the upside is limited and we may have a flat period which will deteriorate time-value on the options. Therefore the volitiliy to the upside may still be limited. For the mid/longer-term the overall trend is to the upside. One key to watch is whether the future short-term dips are getting larger as a indication that the mid/longer-term trend is changing. I consider the mid-term trend as over around the 5/10-30 day range. Any ideas how big this profit-taking pullback will be?? Subjectively, my concern for the mid/longer-term trend is that the market looks so rosey. Asian markets are rebounding great, just heard on CNBC that more and more money is coming into the market, we have had a great run up, starting to hear more UPGRADES. Just heard that the SOX sector got upgraded. Where was the upgrade on the SOX when the index was at 243, now that the SOX is up about 22% off its bottom. Also recall that there were plenty of upgrades on the DRUGs just last week when the DRUG index was already near their all-time highs. This is not to say that this current pullback will be large, but be careful of the future. When some substantial bad news comes out, the pullback at that time could be very substantial. I feel that from the end of Feb thru most of Mar will be to the downside, but that is not based on technicals, just some subjectivity. Seeya