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

To: Chris who wrote (13751)	8/4/1998 11:30:00 AM
From: Robert Graham	Read Replies (1) \| Respond to of 42787

I do not think the market has been normally as mixed as it has been yesterday and today. Here we have traders both buying and selling on moves down. It has been a struggle. The bounce this morning was predictable. Unfortunately the breakdown was no big surprise. We were definitely heading that way, but the question was when. I am surprised at the extent of the bounce. Sometimes I believe the talk about the market suckering in the bulls before dumping. That is is the way it appears to behave at times. A very volatile market, indeed. Next target 8750. Since this is a steep decline, there may be another bounce at 8750. I do think initially the market will attempt to rally on the way down. There are just too many out there that still want to play the long side. A mixed market will need to be shaken out. Be prepared for screams of pain. Anyone playing long in this market, well lets just say this should of been no surprise. So far it looks like 8750 is holding. This is a time only to watch the market, and it is likely it will over time continue down. I am waiting to see what the public speculator in stocks like YHOO and AMZN and AOL will do next. Yesterday I was testing an idea out where even though the index moves past a critical support, sometimes the index can bounce back. I know there must be a way in determining this possibility. So I was looking at specific stocks for the clue. This approach appears to have some merit. I knew the break down was not valid unlesss confirmed by key stocks. Also its break down lacked follow though which I though was odd. But it was right near the end of the trading day. Being able to determine the liklihood of follow through is very important in this volatile market. In this case it looks like the bounce was no surprise, because there is a large enough of a group of people that are still willing to buy when they can see positive signs. But over time the sellers will win out. Even when the market does nothing, apparently the longer the time is before it makes its move, the more likely it will move down. The leadership YHOO, AMZN, and AOL for instance are holding well or are up. This same is for MSFT and INTC. Even CMGI shows some gains today. Evidently on the bounce others rushed back into these stocks and have not sold off despite the markets move down. We are seeing the true ametures at play here. They must be relatively new to this years market. For they have no clue as to what the market can do as we have seen October of last year. It is the clueless that are keeping the market up with no fear of heights. This is an unusual situation. The public speculator tends to flee when trouble like this comes their way. So as long as this condition remains, the market will not fall though its bottom. Bounces and recovery attempts are possible. Bob Graham