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Strategies & Market Trends : LastShadow's Position Trading -- Ignore unavailable to you. Want to Upgrade?

To: AlienTech who wrote (10120)	3/9/1999 6:45:00 PM
From: Jay Lyons	Read Replies (1) \| Respond to of 43080

>wutdahell? where is Kurrylack when you need him< Yesterday, the DJIA ended the day down -8.50 points at 9,727.60 or -0.09%, the NASDAQ Composite was up +60.5 points to 2,397.6, and the Russell 2000 was up +2.05 points at 400.06 or +0.52%. The DJIA appears to be digesting it's recent run up from the last two trading days and it is not abnormal for the DJIA to succumb to some profit taking. Further, the DJIA is only 265 point from the 10,000 level which we think can eventually be taken out near term. Yesterday, the highlight was in the broader market especially the NASDAQ composite, where Intel Corp. (INTC-119 5/8, is rated 'ACCUMULATE' by Prudential Securities Research)* settled an antitrust suit with the Federal Trade Commission. It helped bolster the semiconductor stocks while the Internet stocks went up again. Prudential Securities makes a primary over-the-counter market Intel Corp. For today, expect the market to open down as S&P 500 futures are off from their early highs. Additionally, there may be weakness today in the technology sector following an earnings pre-announcement from Advanced Micro Devices (AMD-18 15/16, is rated 'HOLD' by Prudential Securities Research). (Please read the Attractive Stock Section for ideas today.) Last week we said the optimum word is support. We offered support and resistance levels for four key market averages (see table below) and later on the 30 Dow stocks (see list below). Well, the support levels held and one primary resistance level was broken to the upside. It is encouraging that support zones held well despite early weakness last week but we believe the fact that former resistance on the DJIA (9,647.96) was eclipsed, implies more positive upside momentum, at least for this index. We honestly did not expect a gain of 460 points between Thursday and Friday, but so be it. We will NEVER fight the tape. The DJIA is the first to make an all time new high, simply because it had less downside from the recent weakness in technology stocks. For some time now, we have been calling for a 5 to 10 percent near term market correction and have labeled it a stealth environment because we feel that the DJIA would go down the least. So far, that has been the case. The DJIA and the S&P 500 have gone down only 5%, while the NASDAQ Composite and the Russell 2000 have dropped approximately 10%. Many technology stocks lost at least 20% during this near term corrective phase. We never joined the bearish camp because our stealth scenario includes negative breadth. The vocal bearish technicians clammered aloud the very poor advance/decline line on both the NYSE and the OTC markets. But the market we are in (It began in November 1994) is a SECULAR TRENDING bull market. This is a once in a generation secular trending bull market which has normal periods of negative divergences. Here are the technical levels that, we believe if broken, will indicate further upside or downside momentum: Dow Jones Industrial Average Primary Support 9647.96 (1/08/99) Secondary Support 9063.26 (01/25/99) Primary Resistance 9800/11500.96 Standard and Poors 500 Primary Support 1283.64 (2/1/99) Secondary Support 1205.46 (01/13/99) Primary Resistance 1350/1525 Nasdaq Composite Primary Support 2206.19 (2/10/99) Primary Resistance 2533.44 (2/1/99) Russell 2000 Primary Support 385.63 (11/17/98) Primary Resistance 435.30 (1/20/99) Source: Bridge Data Service Intermediate Term Choppy environments marked with major divergence's can and will happen but as long as the major averages (DJIA and S&P 500) hold up well, we can expect the blue chips to move higher. We never abandoned our 1999 upside targets of 9,800/11,500 for the DJIA and 1,350/1,525 for the S&P 500. We appreciate all of the cross currents that will get in the way of these targets but the fact remains that the DJIA and the S&P 500 have weathered quite a bit recently and should be given the benefit of the doubt that they will move higher over the intermediate term.