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(Complimentary excerpt of Gene's Daily Briefing, concurrently posted at
www.ingerletter.com . It was fun to be short early Wednesday
morning, and long since; as the 900.933.GENE hotline still holds a 1311
March S&P long, which is the price level we reversed short-to-long; holding.)
Gene Inger's Daily Briefing. . . . for Thursday, February 15, 2001:
Good evening;
No Saint Valentine's Day masscare . . . was our call, inline with the forecast
for an attempted down-up-dip-up intraday pattern for Wednesday, which
worked flawlessly, though we couldn't know the forecast would turn-out so
well ahead of time, just knew it needed to, given the proximity to a further
breakdown and potential new leg-down.
Are we out of the woods yet? Of course not; though an 'unrequited love'
theme from Tuesday was borne-out, though of course our longer-range
interpretation of what Mr. Greenspan really meant (if a part of a grander
strategy) surely remains to be seen. In the meantime, the market is giving him
the opportunity to be performing a Potomac 2-step, as we outlined Tuesday
evening. Because of our own interpretation of who was doing the suggested
selling after the expected twin-rally tried on his Testimony to the Senate
Banking Committee, or why they were doing it; today was a vote for the view.
Meanwhile, overall ideas of a January rally which wouldn't be easily
discernible from a bear market rally, followed by a February decline (mostly
in
the first half from called late January/early February short-term tops), gave
us
the opportunity to capture the first (and failing but quite profitable)
rebound
into yesterday, a very nice short-sale in the morning again, and then the
guideline long, which we retain for the moment (live).
Technically . . . this reversal and long-side entry at 1311 in the March S&P
today, is occurring from fairly crucial areas of potential secondary test in
the
Senior Averages, such as the S&P 500 and the Nasdaq 100 (NDX), but not
exactly the same action in the Dow Industrials, which while relatively
overbought (and easing some of that just now by the way), is in an interesting
position to challenge a breakout if 'the boys' can mount one of those
impressive lofts out-and-over the resistance just around 11,000.
(Balance of technical section, which references key points and levels, is
reserved.)
Of course, as this is a nominal Expiration week, and last week was unable to
sustain a rebound, some sort of frantic short-covering is (and may
conceivably continue) as a factor here, which ideally would levitate the
market
again, ideally in another generally up-down-up day. Because of the proximity
of resistance (very close for NASDAQ) for the moment, there is an opportunity
to run-in the shorts, and increase optimism that's so lacking in this market,
concurrently. That would potentially go far to improving tone in this market,
and coming after the post-Greenspeak sell-off, would cause a greater
proportion of the analysts to question whether they had gotten newly excited
about a downside move, about the time such a move was ending, certainly
not commencing. As far as how this pattern evolves, we'll try to touch on more
of that tomorrow night.
Bulls, Bears and Poultry
If the market continues shrugging-off the sellers and surmounts resistance,
then you have what's potentially a secondary test of late December lows; so
that's the grander import of all this, that potentially goes far beyond simply
oscillating rallies & declines, as fun as they have been to capture for S&P
players (or similar), but as frustrating for investors as all get-out. That
means
we risk loosing confidence considerably if this is not able to be built-upon,
and
probably have an entire leg down in the S&P thereafter as you know. If we
can build upon this (our preference), then interestingly enough, it will not
only
send a sign that the new bears are wrong, but impact general consumer
confidence potentially, as the public (so recently bombarded by many news
stories or pieces of mostly-negative information on the economy) would sense
an eventual turn.
May sound strange to suggest that the market could influence consumer
perceptions, but that's 'chicken or egg' arguments. It really doesn't matter
which occurs; just stop the psychological retrenchment, or the Nation will
have more difficulty on all fronts. In that regard, it's technically
noteworthy how
technology stocks (at least momentarily in this scenario) are 'ignoring bad
news', again a pattern associated with bottoming-type action. The Street's
bulls have been scratching, but are mostly moribund, bears of all stripes are
aware how crucial this area is for their shot at reigning-in the hopeful that
think all this growling is failing to recognize the discounting mechanism of
markets (at the same time as it recognizes monetary stimulus is coming with
certain stocks not at price relationships often associated with bottoms, which
is troubling in some areas for sure), while an awfully lot of managers are
refraining from taking bull or bear stances.
Those are the 'chickens'. Hence a poultry moniker for the situation at the
moment. At the same time we have tended to suggest treading lightly for a
couple days, today we did approach the S&P more aggressively, both with
respect to expecting an effort to continue the selling in the morning, and
with
respect to the upside turnaround later. In fact it was really interesting,
because on the 10 a.m. 900.933.GENE hotline comment we determined that
an ideal approach would be to tighten-up the wider mental stop guidelines
(your own efforts may have done all or none of it, as we try to give a focus
on
pattern expectation as we see it, not trade for anyone but ourselves) around
the 10:25-10:40 area, ET. Well what do you know, the downside accelerated
after 10 and then bottomed right at 10:40; that's how we managed to catch
the reversal so close.
Daily action . . . has not suggested getting incredibly excited by all this,
as the
better percentage gains were expected to be from late December and/or after
January's bit of a 'hiccup', and then (ideally) after the February decline
into
March; notwithstanding all this inappropriate speculation about the Fed
somehow dropping the ball on cutting rates; which in our view they have not;
just trying to jockey for position to have better chances of providing maximum
impact when they do adopt the next easing move.
In any event, Wednesday was a session in which the techs never really
declined with the Dow Industrials; thus we suspected (on our early intraday
comments) that we'd hear the pundits claiming that techs are suddenly 'less
interest rate sensitive' than a slew of mainstream companies; and indeed
some are saying that. A handful of fairly predictable technicians indeed not
only says that, but believes the bear isn't over for big companies. Well it
may
not be, but it's working on three years from the top in the Advance/Decline
Line; so contrary to popular delusions, deterioration isn't new now; didn't
start
with the 'dot.bomb' implosion (though psychology was broken as of then); and
should end overall (including a test and/or basing) when the idea of
investments hurts in the pits of not only individuals, but institutional
managers.
There's some room for debate as to whether the 'pain' was great enough last
year for them; we think that it was, though absolutely will listen to whispers
>from the market as they ebb and flow.
That means that (for about a week) we've felt that what 'the boys' would do is
break it just enough to give the impression the prior low had failed
(especially
last weeks low) and then turn-it up again, in a crucial reversal that would
need
follow-through. That's the move we're in now, and we're definitely giving the
market the option of handling it in a favorable manner, especially since our
thinking has been that the technical break and 'blah' feeling permeating the
Street in the wake of Greenspeak yesterday, was as you know, a typical
presentation of an excuse to get negative, which meant everyone who wanted
to sell or argue the downside (including reactive technicians) with a mere
pedestrian response, had that opportunity. That often concludes rapid selling
waves; a reason we were looking for Wednesday's pattern washout and
reversal in the S&P; an evidence of which is not provided (yet) by the Dow,
and for that we're really glad.
Interestingly enough, these accomplishments (surrounding these areas of
technical confusion for many analysts) included catching an intraday short-
sale guideline early-on (around 1319); then covering and reversing long at
March S&P 1311 per the 10 a.m. hotline's guidelines (900.933.GENE) during
the course of the morning. A further call included the urgency of surmounting
noon-hour rebound highs, which was done.
As that level came out, shorts scrambled, and that was the heart of the
afternoon rise of course. Now Thursday needs to challenge, and hopefully
surmount, today's highs, in such a way reversing a pattern that otherwise
would expose subsequent risks next week. One might think we're too
enthusiastic about Wednesday action. given that the DJ dropped over 100.
But, the NASDAQ never got hit, the sellers appear exhausted, and that can
be the stuff of which key reversals are made of; with the DJIA kicking-in
later-
on. We'll see. It goes without saying that the DJIA is coming off overbought,
and the NASDAQ oversold' thus this remains a somewhat bifurcated market
environment.
While there remains no clear general 'visibility' on earnings, we continue to
suspect a turnaround (balance of discussions, on the Fed as well, is reserved
for subscribers).
Clever, if that's really his intension. And we're clearly speculating, but we
think
that's just the ticket for this spot where you really don't want to minimize
the
impact of cuts on the market's psyche, by virtue of having investors smugly
complacent about their coming. Hence, what would otherwise be considered
'good news' prospects (stronger economy) with respect to hinting at a
continued aggressive movement to lower rates from here, being blunted, but
wasn't blunted with any real news (due to the retail data reflecting closeouts
etc.), and therefore essentially cancels out the reason attributed for
yesterday's selling. As a result we thought it was a predictable trading move,
and would be reversed Wed. The hotline's (900.933.GENE) holding long
overnight now.
Bits & Bytes and Economic News & Releases: (both are subscriber only areas).
In summary . . rotational lows clearly developed, and are continuing. Varying
stock-by-stock and within groups, this remains a news-sensitive environment
in every way, as today certainly showed. Maybe too optimistic, but we
expected bears to resist the second rally on Tuesday, and determined to buy
the early washout on Wednesday. The idea was not going to join what's in
what's in many ways a sort of 'thumbs down' on the Fed Chairman's
testimony, as we would like to believe that they know better than to believe
all
our problems are ebbing, thus saw the affair as a trading swing.
The McClellan Oscillator data is around -37 for the NYSE as the NASDAQ
reading is around -20 now (a nominal plus 1 change). Things happened pretty
fast today, but there's no overall change in our call; which happened to
include looking for a short-term pop and then a daily flop on Tuesday; a kind
of drop that ideally would affirm pessimism, as it did, setting up a Wednesday
turnaround. No Valentine's massacre was the call, though note bulls have got
to run with the ball. If not, past levels seen as key to this move, we'll be
compelled to reverse direction once more; reluctantly.
We're long S&P's for now, after two weeks of treading somewhat less lightly,
and we definitely are glad we took the stance yesterday of not getting excited
about frantic downside extensions without more short-term upside tries
intervening this week; well underway. With a short-sale gain of around 800-
900, and then a solid paper gain in the guidelines of more than that, the day
was quite satisfactory, capturing about all that was available in the turn. As
of
8:45 p.m., S&P Globex premium's is 608; with futures up 2 points from regular
Chicago activity, which finished at 1319.80 (now at 1322). Holding long from
1311 for now, with an eye to additional Thursday upside.
Geht zwar hauptsächlich um den Mittwoch, aber die Analyse ist trotzdem ganz interessant.
Danke!
Gruß Dampf
(Complimentary excerpt of Gene's Daily Briefing, concurrently posted at
www.ingerletter.com . It was fun to be short early Wednesday
morning, and long since; as the 900.933.GENE hotline still holds a 1311
March S&P long, which is the price level we reversed short-to-long; holding.)
Gene Inger's Daily Briefing. . . . for Thursday, February 15, 2001:
Good evening;
No Saint Valentine's Day masscare . . . was our call, inline with the forecast
for an attempted down-up-dip-up intraday pattern for Wednesday, which
worked flawlessly, though we couldn't know the forecast would turn-out so
well ahead of time, just knew it needed to, given the proximity to a further
breakdown and potential new leg-down.
Are we out of the woods yet? Of course not; though an 'unrequited love'
theme from Tuesday was borne-out, though of course our longer-range
interpretation of what Mr. Greenspan really meant (if a part of a grander
strategy) surely remains to be seen. In the meantime, the market is giving him
the opportunity to be performing a Potomac 2-step, as we outlined Tuesday
evening. Because of our own interpretation of who was doing the suggested
selling after the expected twin-rally tried on his Testimony to the Senate
Banking Committee, or why they were doing it; today was a vote for the view.
Meanwhile, overall ideas of a January rally which wouldn't be easily
discernible from a bear market rally, followed by a February decline (mostly
in
the first half from called late January/early February short-term tops), gave
us
the opportunity to capture the first (and failing but quite profitable)
rebound
into yesterday, a very nice short-sale in the morning again, and then the
guideline long, which we retain for the moment (live).
Technically . . . this reversal and long-side entry at 1311 in the March S&P
today, is occurring from fairly crucial areas of potential secondary test in
the
Senior Averages, such as the S&P 500 and the Nasdaq 100 (NDX), but not
exactly the same action in the Dow Industrials, which while relatively
overbought (and easing some of that just now by the way), is in an interesting
position to challenge a breakout if 'the boys' can mount one of those
impressive lofts out-and-over the resistance just around 11,000.
(Balance of technical section, which references key points and levels, is
reserved.)
Of course, as this is a nominal Expiration week, and last week was unable to
sustain a rebound, some sort of frantic short-covering is (and may
conceivably continue) as a factor here, which ideally would levitate the
market
again, ideally in another generally up-down-up day. Because of the proximity
of resistance (very close for NASDAQ) for the moment, there is an opportunity
to run-in the shorts, and increase optimism that's so lacking in this market,
concurrently. That would potentially go far to improving tone in this market,
and coming after the post-Greenspeak sell-off, would cause a greater
proportion of the analysts to question whether they had gotten newly excited
about a downside move, about the time such a move was ending, certainly
not commencing. As far as how this pattern evolves, we'll try to touch on more
of that tomorrow night.
Bulls, Bears and Poultry
If the market continues shrugging-off the sellers and surmounts resistance,
then you have what's potentially a secondary test of late December lows; so
that's the grander import of all this, that potentially goes far beyond simply
oscillating rallies & declines, as fun as they have been to capture for S&P
players (or similar), but as frustrating for investors as all get-out. That
means
we risk loosing confidence considerably if this is not able to be built-upon,
and
probably have an entire leg down in the S&P thereafter as you know. If we
can build upon this (our preference), then interestingly enough, it will not
only
send a sign that the new bears are wrong, but impact general consumer
confidence potentially, as the public (so recently bombarded by many news
stories or pieces of mostly-negative information on the economy) would sense
an eventual turn.
May sound strange to suggest that the market could influence consumer
perceptions, but that's 'chicken or egg' arguments. It really doesn't matter
which occurs; just stop the psychological retrenchment, or the Nation will
have more difficulty on all fronts. In that regard, it's technically
noteworthy how
technology stocks (at least momentarily in this scenario) are 'ignoring bad
news', again a pattern associated with bottoming-type action. The Street's
bulls have been scratching, but are mostly moribund, bears of all stripes are
aware how crucial this area is for their shot at reigning-in the hopeful that
think all this growling is failing to recognize the discounting mechanism of
markets (at the same time as it recognizes monetary stimulus is coming with
certain stocks not at price relationships often associated with bottoms, which
is troubling in some areas for sure), while an awfully lot of managers are
refraining from taking bull or bear stances.
Those are the 'chickens'. Hence a poultry moniker for the situation at the
moment. At the same time we have tended to suggest treading lightly for a
couple days, today we did approach the S&P more aggressively, both with
respect to expecting an effort to continue the selling in the morning, and
with
respect to the upside turnaround later. In fact it was really interesting,
because on the 10 a.m. 900.933.GENE hotline comment we determined that
an ideal approach would be to tighten-up the wider mental stop guidelines
(your own efforts may have done all or none of it, as we try to give a focus
on
pattern expectation as we see it, not trade for anyone but ourselves) around
the 10:25-10:40 area, ET. Well what do you know, the downside accelerated
after 10 and then bottomed right at 10:40; that's how we managed to catch
the reversal so close.
Daily action . . . has not suggested getting incredibly excited by all this,
as the
better percentage gains were expected to be from late December and/or after
January's bit of a 'hiccup', and then (ideally) after the February decline
into
March; notwithstanding all this inappropriate speculation about the Fed
somehow dropping the ball on cutting rates; which in our view they have not;
just trying to jockey for position to have better chances of providing maximum
impact when they do adopt the next easing move.
In any event, Wednesday was a session in which the techs never really
declined with the Dow Industrials; thus we suspected (on our early intraday
comments) that we'd hear the pundits claiming that techs are suddenly 'less
interest rate sensitive' than a slew of mainstream companies; and indeed
some are saying that. A handful of fairly predictable technicians indeed not
only says that, but believes the bear isn't over for big companies. Well it
may
not be, but it's working on three years from the top in the Advance/Decline
Line; so contrary to popular delusions, deterioration isn't new now; didn't
start
with the 'dot.bomb' implosion (though psychology was broken as of then); and
should end overall (including a test and/or basing) when the idea of
investments hurts in the pits of not only individuals, but institutional
managers.
There's some room for debate as to whether the 'pain' was great enough last
year for them; we think that it was, though absolutely will listen to whispers
>from the market as they ebb and flow.
That means that (for about a week) we've felt that what 'the boys' would do is
break it just enough to give the impression the prior low had failed
(especially
last weeks low) and then turn-it up again, in a crucial reversal that would
need
follow-through. That's the move we're in now, and we're definitely giving the
market the option of handling it in a favorable manner, especially since our
thinking has been that the technical break and 'blah' feeling permeating the
Street in the wake of Greenspeak yesterday, was as you know, a typical
presentation of an excuse to get negative, which meant everyone who wanted
to sell or argue the downside (including reactive technicians) with a mere
pedestrian response, had that opportunity. That often concludes rapid selling
waves; a reason we were looking for Wednesday's pattern washout and
reversal in the S&P; an evidence of which is not provided (yet) by the Dow,
and for that we're really glad.
Interestingly enough, these accomplishments (surrounding these areas of
technical confusion for many analysts) included catching an intraday short-
sale guideline early-on (around 1319); then covering and reversing long at
March S&P 1311 per the 10 a.m. hotline's guidelines (900.933.GENE) during
the course of the morning. A further call included the urgency of surmounting
noon-hour rebound highs, which was done.
As that level came out, shorts scrambled, and that was the heart of the
afternoon rise of course. Now Thursday needs to challenge, and hopefully
surmount, today's highs, in such a way reversing a pattern that otherwise
would expose subsequent risks next week. One might think we're too
enthusiastic about Wednesday action. given that the DJ dropped over 100.
But, the NASDAQ never got hit, the sellers appear exhausted, and that can
be the stuff of which key reversals are made of; with the DJIA kicking-in
later-
on. We'll see. It goes without saying that the DJIA is coming off overbought,
and the NASDAQ oversold' thus this remains a somewhat bifurcated market
environment.
While there remains no clear general 'visibility' on earnings, we continue to
suspect a turnaround (balance of discussions, on the Fed as well, is reserved
for subscribers).
Clever, if that's really his intension. And we're clearly speculating, but we
think
that's just the ticket for this spot where you really don't want to minimize
the
impact of cuts on the market's psyche, by virtue of having investors smugly
complacent about their coming. Hence, what would otherwise be considered
'good news' prospects (stronger economy) with respect to hinting at a
continued aggressive movement to lower rates from here, being blunted, but
wasn't blunted with any real news (due to the retail data reflecting closeouts
etc.), and therefore essentially cancels out the reason attributed for
yesterday's selling. As a result we thought it was a predictable trading move,
and would be reversed Wed. The hotline's (900.933.GENE) holding long
overnight now.
Bits & Bytes and Economic News & Releases: (both are subscriber only areas).
In summary . . rotational lows clearly developed, and are continuing. Varying
stock-by-stock and within groups, this remains a news-sensitive environment
in every way, as today certainly showed. Maybe too optimistic, but we
expected bears to resist the second rally on Tuesday, and determined to buy
the early washout on Wednesday. The idea was not going to join what's in
what's in many ways a sort of 'thumbs down' on the Fed Chairman's
testimony, as we would like to believe that they know better than to believe
all
our problems are ebbing, thus saw the affair as a trading swing.
The McClellan Oscillator data is around -37 for the NYSE as the NASDAQ
reading is around -20 now (a nominal plus 1 change). Things happened pretty
fast today, but there's no overall change in our call; which happened to
include looking for a short-term pop and then a daily flop on Tuesday; a kind
of drop that ideally would affirm pessimism, as it did, setting up a Wednesday
turnaround. No Valentine's massacre was the call, though note bulls have got
to run with the ball. If not, past levels seen as key to this move, we'll be
compelled to reverse direction once more; reluctantly.
We're long S&P's for now, after two weeks of treading somewhat less lightly,
and we definitely are glad we took the stance yesterday of not getting excited
about frantic downside extensions without more short-term upside tries
intervening this week; well underway. With a short-sale gain of around 800-
900, and then a solid paper gain in the guidelines of more than that, the day
was quite satisfactory, capturing about all that was available in the turn. As
of
8:45 p.m., S&P Globex premium's is 608; with futures up 2 points from regular
Chicago activity, which finished at 1319.80 (now at 1322). Holding long from
1311 for now, with an eye to additional Thursday upside.
Geht zwar hauptsächlich um den Mittwoch, aber die Analyse ist trotzdem ganz interessant.
Danke!
Gruß Dampf
