Summary: Declines
to longer term support levels seem likely over time...maybe soon
Technical Analysis
Accuracy Rating for the last
trading session: 1 =
accurate (The Market broke stated support to trigger short sales and
therefore the trading parameters worked perfectly on Friday.)
| Near Term Outlook |
The near term charts tell us
to expect the Market to begin the day with a bias to increase
initially on Monday. However, they all tell us that the
Markets are in near term down-channels at this time so overall
declines appear likely near term. |
| Mid Term Outlook |
The mid term charts all tell
us that the Markets have broken below the support lines of the
up-channels that had been in place prior to Friday, and this has
nullified those recent up-channels. The next level of clear
support in these mid term charts are neutral support levels, which
on average in each Market, equates to a 1.5 % Market decline over
the next few days. |
| Long Term Outlook |
The longer term charts are
telling us that the Markets have recently tested longer term
resistance levels and they now appear to be declining after those
tests. These longer term charts therefore tell us to expect
declines to longer term support levels over time. The declines
on average if longer term support levels are tested is 4.6% for all
Markets. The SP 500 also shows us a doji which, if confirmed
by a down day on Monday, would tell us to expect rather quick tests
of these support levels. |
Market
Commentary
The Market appears to be
beginning to decline to longer term support levels after having tested
longer term resistance levels recently. If Monday is a down day we
would expect to see these longer term support levels relatively quickly.
Traders
Psychology
- Traders are wondering if
the growth rate of the economy in the 4th quarter will be anything
close to that of the 3rd.
- Traders are beginning to
wonder if the Market may continue to decline
- Traders are wondering,
for the first time in a while, if they should buy the small dips, or
wait for larger ones.
Trading
Approach
We are expecting the market to
begin the day on Monday with a bias to increase. However, we are
also expecting any bounce to be short lived, and we would expect selling
momentum to accelerate on any break of initial near term support levels.
Economic news is light this week, and we believe that sentiment in the
Market is shifting towards expectations of Market declines after longer
term resistance levels have held in place.
Initial trading parameters for the NASDAQ exist between 1910-1945
If 1910 breaks lower expect 1880
If 1945 breaks higher expect 1990
Otherwise expect 1910-1945 to hold.
Trading
Ideas
Watch for
ideas in the Morning Report.
After-Market News
| 1. |
AP ALERT: (CAIRO, Egypt) Voice purported to be Osama bin Laden in
audiotape aired on Al-Jazeera TV urges youth in neighboring nations
to wage holy war in Iraq. |
| Market Reaction: |
Corporate news was very light over the weekend. |
| |
NASDAQ
Futures: NQ03Z
Futures were
flat at the time of
this newsletter and this suggests a flat open on Monday.
Economic
Reports
| Economic Data: |
|
Date |
ET |
Release |
Consensus |
|
Oct 20 |
10:00 |
Leading Indicators |
0.0% |
|
Oct 20 |
14:00 |
Treasury Budget |
$20.8B |
|
Oct 23 |
08:30 |
Initial Claims |
NA |
|
| Anticipated Reaction |
This will be a very light weak for economic data.
We are not expecting eny surprises on Monday. |
|
Consensus
Earnings Expectations
|
Before
The
Open |
|
|
|
3M
Company |
MMM |
0.79 |
|
Anadigics |
ANAD |
-0.37 |
|
Arch
Coal |
ACI |
0.01 |
|
Check
Point
Sftwr |
CHKP |
0.23 |
|
Citigroup |
C |
0.85 |
|
DSP
Group |
DSPG |
0.30 |
|
Hasbro |
HAS |
0.42 |
|
Helix
Tech |
HELX |
-0.02 |
|
IDEXX
Labs |
IDXX |
0.41 |
|
Lexmark |
LXK |
0.70 |
|
M-Systems |
FLSH |
-0.00 |
|
Southwest
Air |
LUV |
0.13 |
|
During
the
Market |
|
|
|
Wrigley |
WWY |
0.50 |
|
After
the
Close |
|
|
|
Altera |
ALTR |
0.11 |
|
Ametek |
AME |
0.64 |
|
Cendant |
CD |
0.45 |
|
CNF
Inc |
CNF |
0.48 |
|
E.piphany |
EPNY |
-0.09 |
|
Eclipsys |
ECLP |
-0.21 |
|
Edwards
Lifesci |
EW |
0.35 |
|
Everest
Re |
RE |
2.05 |
|
FindWhat.com |
FWHT |
0.12 |
|
j2
Global |
JCOM |
0.26 |
|
JDA
Software |
JDAS |
0.07 |
|
KEMET |
KEM |
-0.09 |
|
Lincare
Holdings |
LNCR |
0.55 |
|
Plum
Creek |
PCL |
0.27 |
|
Silicon
Graphics |
SGI |
-0.11 |
|
Silicon
Labs |
SLAB |
0.24 |
|
Technitrol |
TNL |
0.17 |
|
Texas
Instruments |
TXN |
0.09 |
|
THQ
Inc |
THQI |
0.01 |
|
Universal
Health |
UHS |
0.76 |
|
Verisity |
VRST |
0.11 |
|
|
|
|
|
|
|
|
We are
not expecting any substantial
Market moves due to Monday's
earnings releases. |
|
|
|
|
|
|
|
|
Potential
Market Moving Events
| 1. |
The SEMI Book-to-Bill Report will be released after the Market
closes. |
| Market Reaction: |
This data may affect Tuesday's trading. |
| |
The Last Trading Session
The Market began the day with a
neutral bias but the sentiment turned negative after longer term
resistance levels in the SP and the DOW held firm. The Markets
began to decline and at times the declines were quite aggressive.
The Markets fell aggressively in the first hour of trading, and then
gradually thereafter. They closed at the lows of the day, and
sentiment at the close suggested that Traders were beginning to question
the sustainability of the recent Market increases.
Lesson from the session:
RESPECT LONGER TERM SUPPORT AND
RESISTANCE LEVELS ALWAYS.
Performance
Day Trades:
Because day trades are
realistically impossible for any group to follow, we have established a
system that will allow you to have multiple day trading ideas every time
the Market tests one of our critical support or resistance parameters.
We are in the process of automating this system, but until it is
automated this is what you should do to find day trading ideas:
-
Pay attention to our stated
trading Parameters because they give you long and short signals during
the day..
-
Make sure that you read and
understand the way that we use Technical Analysis.
Click Here to
Learn
-
Follow the
Rules of Trading using Technical Analysis specifically.
-
When you are searching for a stock
to day trade refer to the focus list for ideas and find stocks that are
trading near their respective support or resistance levels.
-
Remember that buy signals exist
only on tests of stated support, or upon breaks of stated resistance.
-
Remember that short signals exist
only on tests of stated resistance or upon breaks of stated support.
-
Look first at the stocks that have
been pinpointed by us for you because they are near inflection points
already.
-
If you want to buy a stock look
for strong stocks that are near inflection because going with the flow
is preferable.
-
If you want to short a stock look
for weak stocks that are near inflection because going with the flow is
preferable.
-
It is ok to use a strong stock for
a short just understand that it may be more difficult to short a strong
stock than it is to short a weak stock, just like it is likely to be more difficult to buy a weak stock.
-
Be prepared to enter a trade well
before a trading parameter is tested so that you do not have to do the
research on ideas when the stated parameter is being tested; thus we are
in position to make timely trades..
-
Follow all of the rules of day
trading on every trade:
Day Trading Rules
Swing
Trades (The
focus 4 list)
We are expecting Market declines
to longer term support levels over time, and if Monday is a down ay we
are expecting those declines to occur rather quickly.
We scalped MERQ and SYMC and
replaced them with QLGC and FNM on Friday.
| STOCK |
Short
Entry Target |
Approx. Entry |
Current Price |
Net Gain: |
Target Price: |
Entry Date |
Exit Date |
Stop Limit: |
Status |
Re-entry strategy if stopped: |
| AMZN |
Short |
53.65 |
53.9 |
-.25 |
48 |
10/6/03 |
10/6/03 |
53.9 |
stopped |
|
| AMZN |
Short |
54 |
54.25 |
-.25 |
48 |
10/7/03 |
10/7/03 |
54.25 |
stopped |
|
| MXIM |
Short |
43 |
43.25 |
-.25 |
38 |
10/7/03 |
10/7/03 |
43.25 |
stopped |
|
| MXIM |
Short |
43 |
43.25 |
-.25 |
38 |
10/7/03 |
10/7/03 |
43.25 |
stopped |
|
| MXIM |
Short |
43 |
43.25 |
-.25 |
38 |
10/7/03 |
10/7/03 |
43.25 |
stopped |
|
| MXIM |
Short |
43.5 |
43.75 |
-.25 |
38 |
10/7/03 |
10/8/03 |
43.75 |
stopped |
|
| MXIM |
Short |
43.5 |
43.75 |
-.25 |
38 |
10/8/03 |
10/8/03 |
43.75 |
stopped |
|
| MXIM |
Short |
43.5 |
43.75 |
-.25 |
38 |
10/9/03 |
10/9/03 |
43.75 |
stopped |
|
| MXIM |
Short |
43.5 |
43.75 |
-.25 |
38 |
10/9/03 |
10/9/03 |
43.75 |
stopped |
|
| ERTS |
Short |
99.75 |
100 |
-.25 |
91 |
10/7/03 |
10/7/03 |
100 |
stopped |
|
| ERTS |
Short |
99.75 |
100 |
-.25 |
91 |
10/7/03 |
10/7/03 |
100 |
stopped |
|
| ERTS |
Short |
100 |
100.25 |
-.25 |
91 |
10/7/03 |
10/7/03 |
100.25 |
stopped |
|
| ERTS |
Short |
100 |
100.25 |
-.25 |
91 |
10/7/03 |
10/8/03 |
100.25 |
stopped |
|
| ERTS |
Short |
100 |
101.25 |
-1.25 |
91 |
10/8/03 |
10/9/03 |
101.25 |
stopped |
|
| ERTS |
Short |
101 |
101.25 |
-.25 |
91 |
10/9/03 |
10/9/03 |
101.25 |
stopped |
|
| ERTS |
Short |
101 |
101.25 |
-.25 |
91 |
10/9/03 |
10/10/03 |
101.25 |
stopped |
|
| ADI |
Short |
43.2 |
43.45 |
-.25 |
38 |
10/13/03 |
10/13/03 |
43.45 |
stopped |
n/a |
| AIG |
Short |
61.3 |
61.55 |
-.25 |
57 |
10/13/03 |
10/13/03 |
61.5 |
stopped |
|
| AIG |
Short |
61.5 |
61.75 |
-.25 |
57 |
10/13/03 |
10/14/03 |
61.5 |
stopped |
n/a |
| SYMC |
Short |
66.5 |
66.75 |
-.25 |
55 |
10/6/03 |
10/9/03 |
66.75 |
stopped |
|
| SYMC |
Short |
66.5 |
65 |
1.5 |
55 |
10/6/03 |
10/17/03 |
66.75 |
CLOSED |
n/a |
| MERQ |
Short |
50 |
50.5 |
.5 |
45 |
10/7/03 |
10/8/03 |
50.25 |
stopped |
|
| MERQ |
Short |
52.2 |
49 |
3.2 |
45 |
10/8/03 |
10/17/03 |
52.45 |
CLOSED |
n/a |
| YHOO |
Short |
42.85 |
42.17 |
.68 |
36.4 |
10/13/03 |
|
43.1 |
OPEN |
42.85 |
| NVLS |
Short |
39 |
39.25 |
-.25 |
33 |
10/15/03 |
10/15/03 |
39.25 |
stopped |
|
| NVLS |
Short |
39 |
39.25 |
-.25 |
33 |
10/17/03 |
10/17/03 |
39.25 |
stopped |
|
| NVLS |
Short |
39 |
37.55 |
1.45 |
33 |
10/17/03 |
|
39.25 |
OPEN |
39 |
| FNM |
Short |
73.5 |
73.28 |
.22 |
63 |
10/17/03 |
|
73.75 |
OPEN |
73.5 |
| QLGC |
54 |
53.75 |
53 |
1.75 |
48 |
10/17/03 |
|
54.25 |
OPEN |
54 |
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
|
|
1.8 |
|
|
|
|
|
|
| |
Click on the link below to review our
Swing Trading results.
Swing
Trades Performance page
Long
Term Holds:
When we
initiate a long term portfolio like this we will find ourselves very
happy when the Market is moving higher, but rather upset when it moves
lower. The purpose of this strategy though is to disregard the
fluctuations in the Market in favor of longer term gains. Please
do not get excited by the increases in this portfolio, and do not let
the declines worry you. We have stops in place to prevent losses
in case we are wrong on our timing.
IMCL:
This is a long term hold
TYC:
this is a long term hold.
AMAT: We
missed our re-entry on AMAT.
CSCO:
this is a long term hold.
GE:
this is a long term hold.
AMGN: this is a long term hold.
DELL:
this is a long term hold.
MSFT:
this is a long term hold.
INTC:
this is a long term hold.
| STOCK |
Long or Short |
Entry Target |
Approx. Entry |
Current Price |
Net Gain: |
Target Price: |
Stop Limit: |
Status |
Re-entry strategy: |
| TYC |
Stops |
# stops: |
6 |
|
-1.5 |
|
|
|
|
| TYC |
Long |
12 |
12 |
22.26 |
10.26 |
long term |
1.75 |
OPEN |
|
|
IMCL |
Long |
#stops |
3 |
|
-.75 |
|
9.75 |
|
|
|
IMCL |
Long |
10 |
10 |
33.38 |
23.38 |
long term |
9.75 |
OPEN |
|
|
AMAT |
stops |
# stops: |
9 |
|
-2.75 |
|
|
|
|
|
AMAT |
Long |
11.1 |
|
|
|
|
|
|
|
|
GE |
Stops |
# stops: |
14 |
|
-4 |
|
|
|
|
|
GE |
Long |
23 |
23 |
28.55 |
5.55 |
long term |
22.75 |
OPEN |
|
|
AMGN |
Stops |
# stops: |
10 |
|
-2.5 |
|
|
|
|
|
AMGN |
Long |
36 |
36 |
63.01 |
27.01 |
long term |
35.75 |
OPEN |
|
|
DELL |
Stops |
# stops: |
6 |
|
-1.5 |
|
|
|
|
|
DELL |
Long |
23 |
23 |
36.41 |
13.41 |
long term |
22.75 |
OPEN |
|
|
MSFT |
Stops |
# stops: |
15 |
|
-3.75 |
|
|
|
|
|
MSFT |
Long |
23.4 |
23.5 |
28.93 |
5.43 |
long term |
24 |
OPEN |
|
|
INTC |
Stops |
# stops: |
15 |
|
-3.75 |
|
|
|
|
|
INTC |
Long |
16 |
16 |
31.66 |
15.66 |
long term |
15.75 |
OPEN |
|
|
CSCO |
Stops |
#stops |
2 |
|
-0.5 |
|
|
|
|
|
CSCO |
Long |
12.5 |
12.5 |
20.64 |
8.14 |
long term |
13.75 |
OPEN |
|
|
|
|
|
|
|
|
|
|
|
| Totals: |
|
|
|
|
87.84 |
|
|
|
|
Click on the link below to review our Special Situation trading
results.
Special Situation Performance page
The Dividend
Portfolio
This portfolio of stocks is
designed to be an alternative to the bond funds that you may have in
place at this time. It is designed to provide diversified long
term income and growth in high dividend paying stocks. Please read
more about this strategy before you decide to invest by clicking here:
More Information
All Trades have triggered.
|
Stock |
Long |
Entry Target |
Approx Entry |
Current Price |
Net
gain |
Target Price |
Stop Limit |
Status |
Re-entry Strategy |
| HON |
Long |
24 |
24.05 |
23.75 |
-.25 |
Long Term |
23.75 |
stopped |
|
| HON |
Long |
24 |
24 |
29.01 |
5.01 |
Long Term |
23.75 |
OPEN |
24 |
| BMY |
Long |
26 |
26 |
25.5 |
.5 |
Long Term |
25.75 |
stopped |
|
| BMY |
Long |
24 |
24 |
24.97 |
.97 |
Long Term |
23.75 |
OPEN |
24 |
| JPM |
Long |
31 |
31 |
30.75 |
.25 |
Long Term |
30.75 |
stopped |
|
| JPM |
Long |
31 |
31 |
36.34 |
5.34 |
Long Term |
30.75 |
OPEN |
31 |
| DOW |
Long |
31 |
31.05 |
30.75 |
.3 |
Long Term |
30.75 |
stopped |
|
| DOW |
Long |
31 |
31 |
30.75 |
1 |
Long Term |
30.75 |
stopped |
|
| DOW |
Long |
31 |
31 |
35.2 |
4.2 |
Long Term |
30.75 |
OPEN |
31 |
| SLE |
Long |
17.2 |
17.2 |
18.98 |
1.78 |
Long Term |
16.95 |
OPEN |
17.2 |
| SBC |
Long |
25 |
25 |
24.75 |
1.75 |
Long Term |
24.75 |
stopped |
|
| SBC |
Long |
23.4 |
|
|
|
Long Term |
23.15 |
|
23.4 |
| GM |
Long |
37 |
37 |
36.75 |
1 |
Long Term |
36.75 |
stopped |
|
| GM |
Long |
37 |
37 |
43.14 |
6.14 |
Long Term |
36.75 |
OPEN |
37 |
| Net Gain |
|
|
|
|
18.39 |
|
|
|
|
Good Trading,
BM. |