Read This Part 2

الموضوع في 'السوق الأمريكي للأوراق الماليه' بواسطة aaljawal, بتاريخ ‏24 أكتوبر 2001.

  1. aaljawal

    aaljawal عضو جديد

    ‏24 سبتمبر 2001
    عدد الإعجابات:
    Pullback or Push Higher?

    At best, I'd label this week's earnings reports cloudy. The
    bar was lowered so much, especially by tech companies, in the
    preceding months that many companies have been able to stumble
    over their estimates. The question that has yet to be answered
    is whether or not third-quarter numbers will be the trough in
    this down cycle of corporate profits. It might be so for some
    companies, but I don't have the answer yet.

    In the meantime, I'd like to point out a few developments across
    the major market averages this week. For a few weeks, I had
    been writing about the overbought nature of the averages as
    measured by Stochastics. Last Wednesday's reversal did a lot to
    work off the overbought status of the averages. Then, last
    Friday, the averages rebounded into the close then followed
    through in Monday's trading. That sequence of events caused
    a crossover to the upside in Stochastics across the Big Three
    averages: Dow, S&P, and Nasdaq. But Tuesday's reversal across
    the averages didn't offer any insight into short-term direction,
    which begs the question: Was the recent crossover in Stochastics
    on daily charts merely "noise."

    I won't pretend to have the answer to that question. But I can
    set forth some levels to help find the answer in the coming days.
    In the S&P 500 (SPX.X), I'm still watching the 1085 area, which
    is a retracement level that I've been writing about for a while
    now. The 1085 level has been acting as price magnet of sorts,
    which continues to attract the SPX. If the SPX continues to find
    bids around 1085, then I think it has a shot at breaking above the
    1100 level in the coming days, eventually working to relative
    highs. Any forthcoming breakout attempt above 1100 should have
    some staying power because the SPX has worked off its overbought
    nature as measured by daily Stochastics. Recall that last
    Wednesday morning the SPX tried to advance past 1100, but the
    buying pressure had been exhausted at that point, so there wasn't
    anybody left to carry to index higher. I can conclude that buying
    pressure was exhausted last Wednesday because Stochastics were so

    If the SPX does attempt to breakout above 1100 in the coming
    days, I'll be watching for participation across several key
    sectors, including Bank (BKX.X), Tech (SOX.X, NWX.X, GHA.X),
    Energy (OSX.X, OIX.X), Retail (RLX.X), and Cyclical (CYC.X).
    If I don't see broad participation in a breakout attempt, I'm
    less convinced of the move.

    To the downside, there aren't many near-term levels to reference
    in the SPX. The closest meaningful support level that I can find
    in the SPX is at 1050, which is more than 30 points away from
    Tuesday's close. Until that level is lost, I think we could see
    a lot of "noisy" trading in between levels.

    The Dow Jones Industrial Average's ($INDU) technical set-up is
    pretty close to the S&P's. For its part, the INDU is churning
    around its 50 percent retracement level at 9250. Again, Tuesday's
    reversal didn't offer much insight into shorter-term direction.
    So I'll be watching for either a breakout above 9500 in the
    coming days, or a breakdown below 9100.

    In the event of a breakout above 9500, I would confirm any such
    attempt with an advance past the 61.8 percent retracement level
    at 9525. If that is cleared on any rally attempt, then I think
    the INDU could work up around 9750 over the short-term. And like
    the S&P, I think that a breakout in the INDU can be pursued
    because there aren't as many buyers around as there were last
    Wednesday morning, which means demand could build on a breakout

    To the downside, the INDU has some support at 9100. And if it
    doesn't breakout above 9500 in the coming days, it could
    grow top-heavy, which could lead to the re-test of 9100. Below
    9100 sits the 9000 level, which is the BIG near-term support
    level that I'm monitoring.

    The Nasdaq-100 (NDX.X) is in-between levels and more difficult
    to get a read on currently, at least for me. The NDX finished
    fractionally higher Tuesday, and there were many mixed signals
    within the NDX as measured by the randomness of its sectors,
    such as the Internets up 1 percent, while Chips and Biotechs
    finished lower by almost 1 percent each. Without the
    participation of the Semis (SOX.X) and Biotechs (BTK.X), the
    NDX.X will have a hard time advancing over the short-term.
    But if those two sectors rebound Wednesday, I'll be watcing
    for the NDX.X to advance back above 1400. From there, the
    two levels to monitor are 1420 and 1440, Tuesday's high and
    last Wednesday's high, respectively. Above those two levels
    lies the NDX.X's retracement level at 1460, which should
    serve as meaningful short-term resistance.

    To the downside, the range between 1350 and 1360 could serve
    as support, but I tend to believe that those levels are more
    random than anything. The NDX's Bullish Percent chart just
    recently reversed into a column of 'Os' which hints towards
    profit taking in the index. For that reason, I'd prefer to
    be bullish on strong NDX stocks near support instead of chasing
    stocks higher near resistance. In other words, buying stocks
    near support makes more sense to me, if one were bullish on
    NDX components.

    Tuesday's reversal offered little, if any, insight into future
    short-term direction. In fact, it went against the crossovers
    in the major market averages' Stochastics readings. One
    could argue that the continued anthrax fears was the reason for
    the reversal, while others might suggest that Tuesday's
    reversal was due to profit taking. Additionally, with the
    averages between major support and resistance levels, it's hard
    to have a lot of conviction either way. That's why in times of
    uncertain short-term price action it makes sense to do less in
    the form of trading smaller, which is what I've been doing so
    far this week.

    What I'd like to see in the coming sessions is progress in
    either direction, up or down, I really don't care so long as
    the averages move. The worst kind of market is the one that
    does nothing because I'm an impatient person. And impatience
    generally leads to losses. Pick your spots and be tough.