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Strategies & Market Trends : Stock Attack -- A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Chris who wrote (13531)	7/31/1998 2:58:00 PM
From: The Perfect Hedge	Respond to of 42787

Chris- Doesn't this pullback kind of negate yesterday's rally technically.... b

To: Chris who wrote (13531)	7/31/1998 4:25:00 PM
From: Robert Graham	Read Replies (2) \| Respond to of 42787

Yes, no follow through which is a signal worth listening to. However, keep in mind this is a volatile market. I checks a group of key stocks and found them near or at good intraday support. We may see a bounce soon. I do not know if the bounce will follow through except there will be some short covering that will help. If this market does not resume its dubious attempt at recovery, I think we will be seeing further down days. Some stocks have been holding up unusually well like YHOO. Looks like the bull speculator has not given up yet. A bit too confident if you ask me. Just let me know when you hear the screams of traders having their face ripped off of them as YHOO hits the dirt. I am sure they do not have a clue as to the risk of their position. Then if the stock moves up a bit, they will see that as validation of their position in the stock. Who knows? This market may save them yet, and then they will go away thinking they did the right thing, never to understand the risk they were taking. The market is in a very precarious position right now. The only thing going for it is that it has bottomed for the interim period of time. I am geting a bit colorful in the language department, aren't I? [Update] Just as I was writing the above part of this post, the market closed down. No intraday recovery. Bad news indeed. So the supports I referred to earlier in this post kept the market from falling further, but no bounce that made a difference. Breifing Article Here is an excerpt from biefing on today's amrket aciton. Note the reoccuring pattern of earnings news and how it has helped to erode the market action over the recent past: Close Dow -143.66 at 8883.29, Nasdaq -47.23 at 1872.39, S&P -22.28 at 1120.67: Any hopes of a sustained recovery following yesterday's broad-based rally were squelched today as the market endured a broad-based selloff... Once again, earnings concerns were a triggering mechanism for the retreat... Although Q2 GDP rose a stronger than expected 1.4%, and there was ample evidence of healthy consumer demand and low inflation, investors were unnerved by the fact that the pace of growth had slowed considerably from the 5.5% rate in the first quarter... As such, earnings prospects were again called into question in light of the unsettled economic crisis in Asia... In a second bear camp were those traders disturbed by the stronger than expected GDP increase which raised concerns of a pre-emptive Fed tightening... Taken together, bulls had little success in today's session... The indices traded with a negative bias for the majority of the day and extended their losses dramatically in the final hour and a half of trading... During this time, the Dow, already down 35 points, dropped an additional 160 points before rebounding some to finish a volatile week of trading... Procter & Gamble (-4 1/2) led the pullback, but had plenty of company as 26 of 30 Dow components ended with a loss... J.P. Morgan, International Paper, AT&T, and Union Carbide were the winning standouts... The tech selloff was led by large-cap industry leaders as reflected by a 3.1% drop in the Nasdaq 100... 30-yr bond +3/32 at 5.72%, helped by a strong dollar... DJTA -61.30, erasing yesterday's gain and falling back below key support at 3249... DJUA -6.20... XOI -9.81... XAU -3.15... Number of issues reching new lows outpaced those hitting new highs by a 6-to-1 margin. End of Briefing Article As you see, when the market sentiment is in a vulnerable position, news does have an impact on the market. If the economy is slowing down, there will be more and more frequent reports of earnings growth slowdowns and disappointments. This increases the liklihood that negative news will impact the market at a vulnerable time. It is just a matter of time for the opportunity to arise. This is what I meant by keeping an eye on the bigger picture which includes economics. Economic trends in the form of news items will have its impact on the market when the market is looking for a reason to buy, or in this case, sell. And if the negative news reports continue, they will eventually undermine any further progress made by the market. Bob Graham