Expect Air Pockets Next Year
Yesterday was
a light-volume day with better
breadth and a positive up-down volume ratio. It looked like they would take them
higher in the last 20 minutes but someone had a different agenda as the S&P
futures quickly sold off 6 points to new intraday low, thus getting rid of all
the weak longs who all got stopped out. This quick-flash sell-off was on only
three five-minute bars. Needless to say, by 4:15 p.m. ET, the S&P futures
had regained all 6 points, plus some. The S&P 500 cash didn’t sell off with
the futures and finished the session + 6 points. The techs and Internets roared
back after their day off yesterday. The NDX (Nasdaq 100) ended +110 points,
another record high, along with another record closing high for the S&P 500
cash. The Dow was up only 6 points on a day off after yesterday’s
+85.
| “It will be interesting to see when the greater fools disappear in the first quarter…” |
The S&P 500 is up 18.6% on the year.
I need a 1.4% net gain over these remaining two days for the 20% I said the
Generals would take it to. Please don’t throw me out with the bath water if it’s
only 19%. It will be interesting to see when the greater fools disappear in the
first quarter of next year. There will be some air pockets when that happens.
However, unless there is something unforeseen waiting for us out there in the
economy or Greenspan does something radical like raising regular T margin requirements, which I doubt in an election year, the Generals will probably come
back for their initial dips in early 2000. So, many of these stocks, however,
will have to pull back to at least their 50-day moving averages to build a base
for another move up. Right now as I look at the screen, the S&Ps are up over
5 points to 1488 so it looks like we’re going to have a good day or at least a
good start.
| href=”01032000-3257.cfm”>Program Trading Numbers | ||
| Fair Value | size=2>Buy | size=2>Sell |
17.50 | 18.70 | size=2>16.50 |
Pattern Setups
There are some excellent pattern
setups, five or six of these inside-day narrow-range patterns which, if they
come for them today, will be profitable. Take the entry above the high of the
inside day. There are many commodity traders that take the entries above the
high or low of the day preceding the entry day. I find that if the stock
dynamics are good, why wait for that second day? Take the entry above the high
or low of the first day. Trade these only in the direction of the trend which of
course is up. The setups are: Sun Micro [SUNW>SUNW], Microsoft
[MSFT>MSFT], Yahoo! [YHOO>YHOO], Broadvision [BVSN>BVSN], GE
[GE>GE], Applied Materials [AMAT>AMAT], Vignette [VIGN>VIGN] (a regular
setup), and Oracle [ORCL>ORCL] (another regular setup). Any one of these,
whichever they come for, take them because they’re all good.
Have a good trading day and a Happy New
Year. I look forward to talking to all of you again next year.