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

To: Lee who wrote (55660)	10/16/1998 9:36:00 AM
From: donald sew	Read Replies (3) \| Respond to of 58727

INDEX UPDATE --------------- I normally watch the DOW for direction, but since the DOW is only 30 stocks, I feel that with yesterdays announcement from the FED the DOW huge runup may skew my analysis. In light of that, I feel that, for the time being, I need to watch the SPX for confirmation of the move in the DOW. Even in light of the huge runup yesterday, the SPX is still below the important PEAK/RESISTANCE LINE at 1066. I do feel that this is the KEY resistance line for now. If the SPX breaks 1066 to the upside then I will become a bit more bullish, but if 10066 holds then I will stick to my current position of a trading range. As previous mentioned I am not sure where this trading range is yet since I need more data, but for the time being I believe the range is in the 8400/8500 - 7700/7800 area. I feel the KEY resistance for the DOW now is the 200 day moving average, which is around 8500. Can anyone confirm the 200 DMA, please. Since the SPX closed at 1047, it has 19 points to test the 1066 resistance. Using the 8:1 ratio to compare the SPX to the DOW, that would mean that the DOW would move about 150 points to the upside if the SPX was to get to 1066. That would put the DOW around 8450 which may be near the 200 DMA. All of the major overseas markets, except JAPAN are now OVERBOUGHT and some in CLASS SELL status. I have also noticed that the European markets are off there highs. Right now the GDAX is about 125 points off its intraday HIGHs. In light of that I feel the overseas markets will top off/reverse soon. There will be a pullback forthcoming, no markets go straight up or down. Of course my technicals are all overbought, so I feel that the market will top off soon, but the pullback should be small and take a oscillating pattern. Some days flat/up/down - no clear direction for the next week. Then a retest of the highs wherever it ends up(forming a DOUBLE TOP), then the stronger downswing. That specific downswing could take the market down 50% of this upswing. Lets say we get to 8400 on the DOW, then the pullback could be about 450 points and take the DOW back to the 7900-8000 range - it all depends on where this upswing ends. Again if the upswing ends above 1066 on the SPX, then I would have to re evaluate. I would not initiate PUTs just yet. I will be looking for a DOUBLE TOP to initiate PUTs. After the following pullback, I will go long also. If this is a trading range trend then I will be playing both sides. Seeya