Sunday Newsletter Dated April 16th 2006
I wanted all to see this report i felt it was very important if it plays out as i think it will good luck.
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JERRY OLSON'S
"POINT" OF VIEW NEWSLETTER
DATED APRIL 16TH 2006
A CONTRARIAN'S THOUGHTS
Hello out there all my cyber trading buddies from around the Globe. Happy Easter Sunday to you all that observe this holiday. I hope that you and yours are in good health and spirits.
All thru the years during the many times I was clueless about the markets, of what the dynamics of the ebbs and flows meant to us traders during cycles of highs and lows. It always occurred to me in hindsight what just happened and why. I remember way back in 1987 on that faithful 3 day crash in October, I was in shock and awe of this event even though I lost $60,000 on that wild Monday as I sold all my holdings off at the bottom. That's right just where you would expect most novice traders or investors to sell their stocks. Most of my friends and I had no clue as to what was going on during this time frame. But something occurred to me much later after I refrained from getting back into the market for a few years licking my wounds and healing from that disaster. What occurred to me was my stock CPQ(Compaq computer) was about 75 if memory serves me ahead of the crash, and then was 24-25 post crash. I also remember that about 1-2 years later CPQ was well over 100. What in fact happened was one of the "best buying" opportunities in modern history at the bottom of that fateful Monday. This is the lesson I learned after the fact. The price of CPQ at 25 was a steal like no others. Folks it was on "Fire Sale" at that very bottom. My case and point to all this is we must understand the dynamics of the markets and never fear major bottoms or crashes ever again. They are always buying opportunities if you have the guts and the money to plunge into the abyss. Well I have this funny feeling about interest rates right now. Yes they are moving higher and higher each week ahead of the FOMC meeting May 9th. Fed Funds Futures have priced in 100% for yet another rate hike at that meeting with a 50% chance of another one at the June meeting. I don't think this is going to happen.
If you take a step back from all of this. It seems to me just to coin a cliché's, when things are tilted to one side or the other using the good news bad news syndrome they "always" move back toward the middle or the norm if you will. Right now the 10 year yield chart is showing a partial break out of the rising wedge pattern, while the TLT the Bonds are showing a falling wedge and a major bullish divergence on the CCI that I watch all the time. Now understand this for you non chartist out there, all I am suggesting is the overbought and oversold positions on these opposite charts are suggesting to me it's almost time for a "key reversal" in both of this instruments to the exact opposite of where they are right now. I am suggesting the Bonds are ready to rally(good for stocks), and yields are ready to come down soon even better for stocks, if you will indulge me, they will move toward the "mean" or the norm very soon. So for all intents and purposes I like the market to rally higher starting this week on the advent of the start of earnings season and ahead of the FED meeting too. Yes I know crude oil is going to the roof, but for the life of me I feel it's being manipulated as the weekly reserves numbers do not jive with the current pricing of crude. Next I know there's a ton of negative news feeding into the markets each day but we can not trade that news and as you all know I think it's nothing but noise anyway. We have a lot of economic reports this week PPI CPI Housing starts etc each day of the week along with some big guns reporting earnings and guidance. We also are in the throws of options expiration week to add to the already volatile mix we find ourselves fighting each day. I think it's prudent of us all to let the chips fall where they may along the way, and as I always say " never predict or speculate", "just play caboose". We'll follow the markets direction never fighting the tide on either side of the equation. The trend folks, is always your friend. So from a Contrarian's "point" of view I remain bullish for now till I see the whites of their eyes if and when we break key support areas on the main index charts.
Right now all the leading internal indicators I watch each week on Point & Figure are all in columns of X's and in no danger of reversing back down to give sell signals(YET)! So as we say in the land of Piffers, what is...is! Offense is on the field and we have the ball. Yes there are some shorter term indicators that are weak right now, I do not like the advance decline lines either but heck we just had a pullback, a correction, what would you expect them to look like. When you check the charts for the Percent of Stocks above or below their respective 10 week moving averages they are below that line right now "as expected". Is it going to change? Yes if we rally they will pop back over that trend line and move back to buy side levels on their charts. Same for new highs and lows, this is exactly what I mean when I talk about ebbs and flows. The internal dynamics of the markets are always changing always churning. Sometimes the indicators are all up, and then of course they can be all down. In point of fact there is still a big time mixed bag out there but this has been going on now for months. All I am saying is be mindful of good solid dips to buy still, until they make me change my mind. As of this date, and this point in time, I remain on the bullish side ready for a "hope springs eternal" rally during the next 2-4 weeks for earnings season and the FED meeting. Nothing is in stone folks, we'll see.
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DJIA---WHEN YOU VIEW THIS P&F CHART YOU WILL SEE THE NUMBER (1) FOR JANUARY ABOUT 10 COLUMNS TO THE LEFT OF THE LAST COLUMN OF O'S THAT WE ARE IN RIGHT NOW. WHAT I MENTIONED BEFORE IS THIS INDEX HAS PULLED BACK EACH TIME IT GAVE A NEW BUY SIGNAL ABOUT 4 BOXES OR 200 POINTS. ALSO THE MIDDLE OF THE 10 WEEK TRADING BAND IS AT 11,050 WE NEARLY HIT THAT LAST WEEK BY ABOUT 4-5 POINTS IS ALL. SO IF THIS PATTERN PLAYS OUT AGAIN WE ARE GOING TO NEW 52 WEEK HIGHS.
COMPX-NAZ---ON THE MAIN DEFAULT CHART THIS INDEX HASN'T EVEN REVERSED BACK DOWN YET. IN FACT IF WE DO MOVE LOWER THERE'S HUGE SUPPORT AT 2240-60 AREA THAT I DOUBT WOULD FAIL NEAR TERM. I THINK TECH LEADS US BACK UP TO NEW 52 WEEK HIGHS.
NDX---WE MIGHT SEE THE 1680 THIS WEEK ON A SPIKE DOWN DURING OP EX WEEK BUT THERE'S EXCELLENT SUPPORT THERE AND AGAIN AT 1640. I DID A NEAR TERM FIBONNACI PROJECTION ON THIS CHART AND IF WE CAN MANAGE A RALLY HERE THE UPSIDE TARGETS LOOKS LIKE 1772.00 AT THE 61.8% PROJECTION OFF THE RECENT MARCH DOUBLE BOTTOM LOWS. WITH A TOP NUMBER ABOUT 1816.00.
RUT 2000---THE SMALL CAP ARENA AND MID CAPS NEED TO MOVE BACK UP THIS WEEK OR THEY COULD FAIL AND BREAK UNDER THEIR RESPECTIVE UP TREND LINES. I LIKE THE BIG CAPS ANYWAY TO TAKE OVER LEADERSHIP FOR THE NEXT 30-60 DAYS.
SOX INDEX SEMIS---THIS CHART MEANS A LOT FOR THE HEALTH OF TECH. THE SOX NEEDS TO IMMEDIATELY REVERSE BACK UP AT 520. THEN BREAK THRU THE BEARISH RESISTANCE LINE(BRL) AT 530. THIS WOULD REALLY GET US GOING HIGHER BIG TIME. HOWEVER A BREAK BELOW 485 WOULD NOT BE PRETTY.
HUI---THE GOLD BUG INDEX---LET ME SAY TO YOU GOLD TRADERS IF THE HUI TAKES OUT 356 ON THIS CHART GOLD PRICES PROBABLY WILL BE THRU THE ROOF. IT HAD THE PULLBACK OF 4 BOXES BUT AS YOU CAN SEE BY THOSE 3 GREEN X'S IT PROMPTLY REVERSED BACK UP FAST.
CL--M6---JUNE CRUDE FUTURES---A PERSISTENCE POUNDING FOR THE CONSUMER SO FAR. THE CHART SAYS IT ALL.
TLT---I SHARES OF THE LEHMAN 20 YEAR BOND FUND---
TNX---10 YEAR YIELD----
SPX----1280 IS THE NORMAL 3 BOX REVERSAL BACK DOWN. IT HASN'T HAPPENED YET. THIS INDEX IS MY PROXY FOR THE MARKETS OVERALL DIRECTION. IT'S STILL BULLISH ON THAT CHART--- PERIOD!
ES-M6 E-MINI FUTURES---WE HAD THIS ALL IMPORTANT TEST OF THE 1289.00 AREA LAST WEEK. WE MUST MOVE UP IMMEDIATELY TO AVOID A BREAK OF THE BULLISH SUPPORT LINE ON P&F.
NQ--M6 E-MINI NAS FUTURES---I LIKE THE LOOK OF THIS CHART BETTER THEN THE S&P'S WE NEED TO REALLY DO THE SAME THING AND RALLY FROM THE GET GO.
ALL AND ALL WE ARE NOT IN BAD SHAPE HERE AFTER THIS MUCH NEEDED PULLBACK THE $64,000 QUESTION IS CAN WE LAUNCH OFF THESE SUPPORTS RIGHT NOW. WE'LL KNOW SOON ENOUGH.
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EARNINGS SEASON STARTS MONDAY WITH SOME HEAVY HITTERS THIS WEEK. WE WILL TRADE A LOT OF AFTER HOURS(AH) REPORTS THIS WEEK SO BE READY. ONE IMPORTANT CAVEAT FOR YOU ALL. "NEVER HOLD A STOCK THRU EARNINGS". MOST OF THE TIME THE STREET SELLS THE NEWS FIRST AND ASK'S QUESTIONS LATER. YOU'LL GET KILLED IF YOU TRY THIS. SO FORGET IT YOU HEAR?
AH( AFTER HOURS)
EPS(EARNINGS PER SHARE)
BTL(BUY TRIGGER LONG)
SST(SHORT SALE TRIGGER)
BSB(BACKSIDE BOUNCE)
HOD(HIGH OF DAY)
LOD(LOW OF DAY)
BSL(BULLISH SUPPORT LINE)
BRL(BEARISH RESISTANCE LINE)
S(SUPPORT)
R(RESISTANCE)
B/O(BREAKOUT)
O/H(OVERHEAD)
DCC(DAILY CNADLE CHART)
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ALKS---23.20 THE BTL---22.40 THE SST---HAD MAJOR FDA NEWS FRIDAY ABOUT THEIR VIVITROL ALCOHOL DRUG I LOOK FOR IT TO RALLY MONDAY.
CEPH---60.75 THE BTL---59.75 THE SST---DUE FOR A BOUNCE OFF THAT HUGE NEWS FOR ALKS. CEPH WILL SELL IT AND MARKET THIS DRUG. I LIKE IT TO DO A BSB TO THE 20 EMA DAILY CANDLE CHART(DCC)
YHOO---31.65 THE BTL---30.80 THE SST---HAS EPS DATE TUES AH. BEEN DEAD AS A DOG LATELY WILL IT RUN UP A BIT AHEAD OF THAT EARNINGS REPORT?
CYMI---48.30 THE BTL---47.50 THE SST---HAS EPS DATE TUES AH. I LOVE THIS CHART. BULL FLAG BOUNCE OFF THE 20 EMA AND SHOULD POP MONDAY INTO TUES MARKET WILLING.
AMGN---70.45 THE BTL---69.60 THE SST---HAS EPS TUES AH BUT BROKE DOWN ON P&F BREAKING A TRIPLE BOTTOM. HOWEVER IF IT CAN PRINT 73.00 THAT WILL NEGATE THAT BREAK.
AAPL---66.95 THE BTL---66.00 THE SST---HAS EPS DATE WEDS AH. THE WHOLE STREET WILL BE WAITING FOR THIS ONE FOLKS TRUST ME. A BIG TIME BELLWEATHER FOR SURE.
CTXS---38.40 THE BTL---37.55 THE SST---HAS EPS DATE WEDS AH A CRAMER PUMP FOR A WHILE NOW. WE SHALL SEE. THE CHARTS LOOK GOOD ON THIS STOCK.
EBAY---39.00 THE BTL---38.20 THE SST---HAS EPS DATE WEDS AH. THE STREET HAS PLACED EBAY IN THE SAME CATEGORY AS INTC AND MSFT. LIKE FORGETAABOUTIT. I LIKE IT UP.
NVLS---25.70 THE BTL---24.90 THE SST---HAS EPS DATE WEDS AH ANOTHER SOLID SEMIS PLAY WITH A DEVELOPING CHART HERE.
QCOM---51.90 THE BTL---51.00 THE SST---HAS EPS DATE WEDS AH A BIG TIME PLAYER IN THE WORLD OF TECH. THE STREET LAREADY KNOWS IT GUIDED HIGHER. SHOULD REPORT GOOD
RMBS---44.15 THE BTL---43.30 THE SST---THIS STOCK HAS BEEN ON A TEAR. IT HAS UNCONFIRMED EPS DATE WEDS AH. GREAT POWER RIGHT NOW AND THE TRIAL IS DONE.
JNPR---19.60 THE BTL---18.95 THE SST---SITTING RIGHT AT S ON THE BSL LINE HAS EPS DATE WEDS AH. NEEDS TO POP RIGHT NOW.
BRCM---44.65 THE BTL---43.90 THE SST---HAS EPS DATE THURS AH AND IT BETTER BE GOOD THIS STOCK IS FLOUNDERING SINCE THAT SPLIT. IT BLEW AWAY THE NUMBERS LAST Q.
MRVL---58.15 THE BTL---57.30 THE SST---IF THE SEMIS COME IN GOOD THIS STOCK WILL BLOW AND GO ABOVE 60 VERY FAST. KEEP AT LEAST ONE GOOD EYE ON THIS ONE.
FFIV---66.10 THE BTL---65.30 THE SST---HAS EPS DATE THURS AH HAS BEEN REPORTING EXCELLENT QUARTERS AND IS DUE FOR A POP INTO THAT DATE.
SNDK---62.20 THE BTL---61.40 THE SST---HAS EPS DATE THURS AH AND GOES INTO THE S&P 500 INDEX THIS WEEK. OOH LA LA ONE WILD AND CRAZY GUY FOLKS.
FLSH---30.75 THE BTL---29.90 THE SST---THIS STOCK ALREADY GUIDED HIGHER HECK IF SNDK COMES IN GOOD PLAY THIS ONE IN SYMPATHY FOR A BIG POP HIGHER.
SWIR---14.05 THE BTL---13.40 THE SST---OK LISTEN UP IT HAS EPS THURS AH. I LIKE IT TO RUN UP TOWARD THAT DATE THEY KILLED THE NUMBER LAST Q AND LANGUISHED TILL NOW. IF IT BREAKS 15.00 LOOKOUT ABOVE.
SYNA---25.85 THE BTL---25.25 THE SST---HAS EPS DATE THURS AH BROKE OUT OF THE DT LINE AND IS FLAGGING HERE. COULD POP AHEAD OF EARNINGS.
GOOG---WATCH FOR A BREAK OVER 420 AS GOOG HAS EPS DATE THURS AH. THE UPSIDE TARGET IS 450 IF THEY COME IN GOOD. I THINK THEY WILL, SHOULD BE NICE TO THE UPSIDE.
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OK EVERYONE BUCKLE UP FOR SAFETY AS THIS SHOULD BE ONE WILD AND CRAZY WEEK, WHAT WITH OP EX HERE, ECO REPORTS GALORE, EPS ALL WEEK LONG, WHAT MORE COULD A GROUP OF SCALP TRADER WISH FOR?
BEST OF LUCK THIS WEEK
LET'S MAKE SOME SERIOUS MONEY
SEE YOU ALL IN THE ROOM ON MONDAY
BEST REGARDS
JERRY & INNA
Jerry Olson
in the room.
