Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Robert Graham who wrote (14668)	8/18/1998 1:09:00 PM
From: Lee Lichterman III	Read Replies (1) \| Respond to of 42787

I agree however I think we also have to pay attention to the key numbers on the indexes. I notice as of right now we are at the crucial yeah or nay points every where I look. DOW=8700, SPX 1100, NASDAQ 1850, MU at 35 1/2-36 resistance, KEA 56 1/2 resistance etc etc etc. I have been sitting on the side today waiting to see what happens although I have missed some good trades. Breadth looks a little better today than yesterday but the TICK is trending down now, so I feel we may get a closing sell off. I hate to say it but I think we are nearing the end of this short spike. DELL earnings may spark it again tomorrow but it seems to me there is going to be some serious profit taking soon. I have learned to respect the TICK and right now it is telling me that this is not the time to be jumping in.

To: Robert Graham who wrote (14668)	8/18/1998 1:18:00 PM
From: Robert Graham	Read Replies (1) \| Respond to of 42787

Looks like my verbosity is getting the best of me today... Over recent history the market has been moving down in small decrements. What has been deceiving is the trading range which has been larger than normal. I have noticed there is a type of price pattern that is like a consolidation pattern even though there is a direction to this price pattern. What I mean by a type of consolidation pattern here is that it is what the stock does before it makes its next move, which can be up or down. Some consolidation patterns give a hint to direction while others do not, or at least you need to look elsewhere for those clues. This price pattern of the DJIA we have been witnessing that Donald Sew has been referring to IMO was such a pattern. I have seen this before, but I only remember it one or twice on indices like the DJIA so I was not sure when I first saw it. Usually what happens is that the price will end up taking a direction, in this case up. This makes sense since a bottom has been established and validated at an earlier time already. The expectation was UP, but no one knew exactly when this would happen. It looks like the market waited for a sign before committing their trades to a direction. But of course this reasoning is incomplete. I have not been following the market as closely as I would of liked to. Up to this point in time, the traders in the market have been primarily taking a countertrend strategy. This explains why price advances would melt down. Those traders who did not recognize this sat on a stock like DELL they purchased when it moved up earlier in the day just to watch it drop from its high of the day wondering what had happened. As a day trader it is critical to understand what the market is doing. Otherwise they will not be a day trader for very long. Now the market appears to be taking a trend trading strategy which has allowed the market to post a good gain yesterday and extend its gains today. Watch this advance carefully around key resistances, and in particular around 8750 and 9000 if this rally makes it that far. There is pent up buying interest so 9000 is possible. Watch to see be money is being moved from bonds back into the stock market, and watch to see if the defensive issues are being liquidated to move into the more speculative issues in the market. Look closely at what groups continue to lead the advance and watch for signs that the big money is using this rally as an opportunity to liquidate their positions in the industry groups leading the rally to move it off to other industry groups or perhaps back into bonds. Bob Graham