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

To: Patrick Slevin who wrote (35321)	2/21/1998 10:44:00 AM
From: donald sew	Read Replies (1) \| Respond to of 58727

Patrick, I am definitely bullish on this market, and do believe that it will go up further, but before it can it technically should consolidate first a little more. The Key is that the consolidation will be selectively, as you mentioned. Here are some interesting facts. From the intraday highs to the intraday lows the DOW retreated about 170 points and the NAZ about 20 points (100 DOW points) last week (at different times), but very few will see that. Most will only look at the closing prices. The XAL dropped 67 points, and just for comparison purpose that would be equal to 750 DOW points (67 X 11.2 - although that is not a fair comparison since it moves exponentially to the DOW). There are pockets of weaknesses. Many will believe that the rally Friday in the DOW was extremely strong since it reversed close to 100 points off the lows, but it did have some weaknesses. The NAZ and SPX also reversed nicely, but noticed that it was not very broad based since most the HiTech indexes I watch were still negative and only slightly off their lows - SOX, DDX, IIX, EGI, YTK, CWX, and an important one the RUT. Of course that could change Monday and we are off to the races across the board, but the liklihood is that it will not, just yet. A few more days of sector/niche consolidation and at least some flatness in the DOW, SPX, NAZ for the next few days, then the upswing to restart at the mid/end of next week (WED/Thur/Fri). I consider flatnes as PLUS or MINUS 30 DOW points, so yes it can still move up slightly and I will still consider that as being flat on a technical basis. Since we are talking about sector/niche weaknesses, here are some of them on a very short-term(1-2 day) technical basis: SOX - with the exception of INTC DDX XAL BKX TRX CWX EGI I also noticed that the intraday swings are getting larger slightly - it can mean nothing but it does give the hint of some downside volitility. This is not to mean that we are not in an up market, just a little consolidation. Also, last week was the 1st time of seeing outflows of cash, it was mention somewhere in the range of 400-500 million, where previous periods were inflows of 2.5 BILLION. That is not a small reversal, and if I mis-stated any figures please correct me. I think you made a good play Patrick by getting those PUTs, aat least for the short-term. My strategy is to wait for a further pullback in one of the sectors as the best senerios to get back into the market on the long side. I will not spend alot of energy in determining if the DOW/NAZ will drop more and by how much, but to try and identify areas which should give me some value and still have good upside potential and hope for a pullback in these areas. I guess we can call it niche index trading(please dont come up with an abbreviation - MR.ITMOS >>>GGGGGGGGGGGGGGG<<<<). Seeya and good luck.