Three Shorts And A Long For Today
Despite the strong closing on Monday, the
market went right back to its meandering, directionless ways on Tuesday. Other
than the opening surge in the semis and a couple of the intraday plays I had
mentioned in
yesterday’s column, (FRX short,
ROOM short) it was pretty quiet. Even the
earnings bombshell from the pig of pigs Micron
Technology
(
MU |
Quote |
Chart |
News |
PowerRating) did little to rattle the futures in after-hours.
Hmmm? All I can say is that I am glad the year is coming to an end, a break from
this price action will be exactly what is needed in order to come back fresh and
with a new perspective for 2003.
Technically, we are still in position to make things happen as we continue to
hover around 909 and 894. A surge through either of these levels should ignite
interest, especially with Triple Witching this week. Just be patient. You will
recall that a decisive break of 894 should set the stage for a move down to
881-82, while a breach of 909 will leave open the possibility of a run to 916
and 925. As has been the M.O. lately, semiconductor stocks offer the most travel
range intraday.
The beginning of the year should provide some good
opportunities for those who
are nimble. Based purely on time and price, I suspect the market will change
trend on or around Jan. 15. Will the change be up or down? At this point it
is not clear. However, by simply looking at some previous key data points on the
last three swing highs/lows in the S&P cash (SPX), I can draw a preliminary, but
certainly not definitive conclusion.
As we can see, each of the last significant highs and lows
was anywhere from
26-36 days apart.
-
July low/August high — 22 trading days
-
August high/October low — 34 trading days
-
October low/December high — 37 trading days
If we simply extrapolate this going forward and assume that
this move will also
be proportional, we run right into the middle of January. If, as the current
chart suggests,
we continue the trend down , it should mark a great buying opportunity in what
is
sure to be just another bear market rally fuelled by unrealistic expectations
about
the economy and the talking heads that appear on CNBC. (It is amazing these
people still have jobs.)
However, at this point it is unclear. I will update you at
the beginning of January
as to my thoughts.
| Intraday Setups | |
| Â | |
Stock |
Action |
ERTS |
Short |
| GS | Short |
| LXK | Short |
| BJS | Long |
*Naturally, the entry points need to coincide with
overall intraday market direction. So, be sure to take a look at these issues on
both 30- and 60-minute charts to gauge the best entry points. Look for pullbacks
and consolidation as a heads up for an entry point.
Key Technical
Numbers (futures):
S&Ps |
Nasdaq |
| 927 | 1064 |
| *916* | 1058.50 |
| *909* | 1053 |
| 903 | 1051 |
| 901 | 1048 |
| 896 | 1043 |
| 889 | 1040 |
| *884* | 1037.50 |
| Â | *1032* |
| Â | 1028.50 |
| Â | 1021.50 |
| Â | 1011 |
* indicates a level that is more significant
As always, feel free to send me your comments and
questions.