عضو نشط
24 سبتمبر 2001
Several problems facing the markets next week are simply a
factor of cycles. The biotechs have been storming to higher
levels for several weeks. Many of them are approaching levels
of resistance dating back many months. The BTK.X is only 23
points away from serious resistance at 600 and is up +38%
since 9/11. Any reasonable trader would tell you that a pause
for a rest was imminent. The SOX.X is nearing resistance at
500 (19 points away) and has rallied substantially since 9/11.
The Nasdaq has reaped the benefits of the Biotechs and Semis
in its +27% rally. Take out those two sectors and the Nasdaq
is devoid of any other leadership groups. Retail (RLX.X) has
run into trouble in the 825 range and will be no help. Software
has been strong but is also ready for profit taking.

My advice is simply this. We have had a great run and "historically"
next week is a bullish week. We hope history repeats itself and
the Dow duplicates this week with another +341 point gain. The
Nasdaq basically held its ground despite profit taking in techs
on Friday and is only 150 points away from serious resistance
at 1920. I will take it! Give us a +150 point week and then
take a well deserved rest before heading for 2000 again! The
problem as I see it is the already over extended markets. We
are due for profit taking next week. The farther up we go the
more likely and more severe it could be. I have been telling
you to go long and I am not changing that instruction. As traders
we need to set some stop losses on those plays and be prepared
to move to the sidelines for a day or two. Any pullback will
be another buying opportunity and we should be looking forward
to getting into our next series of positions cheaper. For those
of you in cash the prospect of another pullback is exciting.
For those currently long it is an opportunity to take profits
and reload again. Either way the long term outlook is still
positive and the prospect of having a new bull market ahead of
us will do wonders for consumer sentiment. An October without
a crash? It is almost a reality