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John - Based on your exquisite
timing with those short puts, even a 5 to 10% decline from this point should not
affect those positions, correct ? Lots of premium should have been taken-out by
now.
Are they DEC, JAN, or FEB
expirations ?
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style="PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #000000 2px solid">
<FONT face=Tahoma
size=2>-----Original Message-----From: John Cappello
[mailto:jvc689@xxxxxxx]Sent: Sunday, December 08, 2002 9:50
AMTo: Realtraders@xxxxxxxxxxxxxxxCc:
MedianLine@xxxxxxxxxxxxxxxSubject: [RT] Fwd: "Chart Watchers
Weekly" (HTML Version) for 08 December 2002This kind of
took some of the wind out of my sails. John ------------------ Forward Header
--------------------Originally From: Chip Anderson
Subject: "Chart Watchers Weekly" (HTML Version) for
08 December 2002Date: 12/07/2002 11:29pmReceived: from
StockCharts.com ([12.144.129.34]) by tom.po.com (8.12.2/8.12.2) with ESMTP id
gB88KbXF017803 for ; Sun, 8 Dec 2002 03:20:37 -0500 (EST)
Received: from StockCharts.com by stockcharts.com with SMTP
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Chart
Watchers Weekly - 08 December 2002
published by StockCharts.com
<IMG height=23 alt=""
src="http://stockcharts.com/images/chartwatchers/i_logo.gif"; width=42
border=0 NOSEND="1"> <A class=main
href="#chip">ChartWatchers | John
Murphy | Site News | <A class=main
href="#carl">Decision Point | TD
Trader | Rhodes Report | <A
class=main href="#links">Subscription Info
Hello Fellow ChartWatchers!
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<TD id=header style="COLOR: #ffffff; text-: center" width="15%"
bgColor=#9999cc>ChartWatchers
This week, I thought that I'd show you a couple of long term charts
illustrating how the current market rally is overbought and due for a
pullback, how the major indices are hitting long-term resistance levels
and why the intermarket picture indicates that you still need to be
careful these days. Then I read John Murphy's latest Market Message
update and saw that he has already said all of that much better than I
ever could. So, as a special treat, I thought we'd share John's entire
weekend update with all of our ChartWatchers. You'll find it below along
with columns from our "regulars" - Carl Swenlin, Arthur Hill and Richard
Rhodes. Enjoy!
Be sure to read the "Site News" section of this newsletter for
exciting news about the latest member benefits resulting from our merger
with MurphyMorris.com.
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<TD id=header style="COLOR: #ffffff; text-: center" width="15%"
bgColor=#9999cc>Market Message
MARKET STILL BELOW RESISTANCE LEVELS... While we utilize daily
charts for shorter-term timing purposes, weekly and monthly charts are
much better for picturing the market's longer-term trends. The market
may have stopped going down. But it hasn't gone up much either --
certainly not enough to reverse the major bear trend. Chart 1 shows that
the recent rally in the S&P 500 has failed to overcome initial chart
resistance at the August high (and the 40- week moving average). Those
are the minimum requirements needed to confirm that a major bottom has
been seen. Interestingly, the flat trendline where the market is meeting
new selling coincides pretty closely with the lows of last September.
That's because previous lows -- once they're broken on the downside --
become new resistance barriers over the market. The weekly RSI line has
reached potential resistance at 50. The good news is that the weekly
MACD lines are still positive. Chart 2 draws a trendline over the highs
of the last three years. It hasn't been broken yet. A decisive upside
break of that trendline is also needed to signal that the big bear has
ended.
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src="http://stockcharts.com/commentary/archives/images/cww20021208m-1.png";
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src="http://stockcharts.com/commentary/archives/images/cww20021208m-2.png";
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MONTHLY VIEW STILL NEGATIVE... The monthly chart also puts the
recent bounce into better perspective. The blue down trendline matches
the resistance line shown in Chart 2. The flat red line is the
"neckline" that was broken during July. In order to negate the potential
"head and shoulders" top, the S&P needs to rise back over the
neckline. So far, it hasn't been able to do it. The monthly stochastics
lines have turned positive from oversold territory under 20 -- which is
encouraging. However, the monthly MACD lines (which are slower to turn)
haven't turned positive yet. That would also have to happen to signal
that the the two-year bear market has ended.
<IMG
src="http://stockcharts.com/commentary/archives/images/cww20021208m-3.png";
NOSEND="1">
HEAD AND SHOULDERS BOTTOM?... Several of our members has asked
about the possible formation of a "head and shoulders" bottom being
formed in the major averages. According to that view, the "left
shoulder" was formed by the July bottom -- with the "head" forming at
the October bottom. The S&P has stalled at its August high -- and a
possible "neckline". So far, so good. To complete that pattern, the
market still needs to pullback enough to form a "right shoulder". Then,
it has to break the August high (and the 200- day moving average). It's
certainly a plausible interpretation -- and one which we're taking
seriously. The On balance volume line has already exceeded its August
high.
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src="http://stockcharts.com/commentary/archives/images/cww20021208m-4.png";
NOSEND="1">
GOLD STOCKS SHINING AGAIN... Gold stocks have been the week's
strongest group. The daily chart shows the XAU exceeding its November
high and its 200-day moving average. That's a bullish breakout. The
weekly chart shows that the major uptrend in the XAU that started two
years ago is still intact. It shows the recent pullback finding support
at the two-year support line. Some of our members have asked about a
"symmetrical triangle" that's been forming over the past six months
(defined by the converging green lines). Since the prior trend was up,
the triangle is a bullish continuation pattern. The weekly chart also
shows that the six-month falling trendline has been broken on the
upside. That's another bullish sign. Two intermarket factors helping
gold stocks are selling in stocks -- and a falling dollar. The dollar
has been slipping all week -- and fell sharply today. A falling dollar
is usually bullish for gold and gold stocks.
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src="http://stockcharts.com/commentary/archives/images/cww20021208m-5.png";
NOSEND="1">
<IMG
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NOSEND="1">
To get John's commentary throughout the week, sign up for John
Murphy's Market Message by clicking <A
href="http://stockcharts.com/def/servlet/SignUp?gotoform=newintro";>here.
Recently Joined? Need a
Hand?
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John
Murphy's GettingStarted
withStockCharts.com15- minute
exercisebooklet will help you get started.<A
href="http://stockcharts.com/Support/GettingStarted.pdf";>Download
Now!
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id=news name=news>
WHAT'S NEW ON THE WEBSITE
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<TD id=header style="COLOR: #ffffff; text-: center" width="15%"
bgColor=#9999cc>StockCharts.com
A New "StockCharts Tutorial" booklet from John MurphyIf
you think that you aren't getting everything you can out of your
StockCharts' membership, stop what you're doing and download our new
tutorial "<A target=gs
href="http://stockcharts.com/support/GettingStarted.pdf";>John Murphy's
Getting Started with StockCharts.com" (<A target=adobe
href="http://www.adobe.com/products/acrobat/readstep2.html";>Adobe
Acrobat required). This 23-page booklet will ensure that you get off
on the right foot with your membership. It takes about 15 minutes to
complete - possibly the most productive 15 minutes you'll ever spend
with your computer. Simply download and print this free booklet and then
"Get Started!"
Unified StockCharts/Murphy Memberships Now Available!Using
our new unified sign-up page, StockCharts members can now add John
Murphy's commentary to their existing accounts at a big discount.
Similarly, existing Murphy subscriber can add our "Basic" or "Extra"
charting service to their existing account and save money. New
subscribers can now join both services in one easy step and existing
members can renew or extend their memberships with much less hassle. The
base pricing for each service hasn't changed, but the benefits of
joining have never been greater. <A target=su
href="http://stockcharts.com/def/servlet/SignUp?gotoform=newintro";>Click
here to learn more about joining or upgrading your membership today.
Don't forget: Subscribing in December can maximize your tax
benefits!
"John Murphy" tab allows Murphy subscribers access from within
StockChartsIn addition to unifying our membership options, we
also took a big step towards unifying the StockCharts and MurphyMorris
websites last week with the introduction of the "John Murphy" tab on the
StockCharts website. Now anyone who subscribes to John Murphy's Market
Message service can access John's updates via either John's old
website, MurphyMorris.com, or by clicking on the "John Murphy" tab at
the top of any StockCharts.com page. John's annotated Chart Book, his
1500-stock Market Carpet and his audio commentary are also available on
either site. Just enter your regular User ID and password into the boxes
that appear and you'll gain instant access. This is just the beginning -
you'll start to see more and more of John on StockCharts.com in the
coming weeks and months. Stay tuned...<A
name=carl>
Investors Intelligence Sentiment
<IMG height=23 alt=""
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border=0 NOSEND="1">
<TD id=header style="COLOR: #ffffff; text-: center" width="15%"
bgColor=#9999cc>DecisionPoint
A lot of people tell you about this sentiment poll and give you their
interpretation of the weekly results, but it is always best to look at
the chart and make the historical comparisons yourself.
Note that high bullish readings appear at tops in a bear market, and
in bull markets they mark periods of consolidation or deceleration. The
threshold for major market bottoms is 50% bears. Note that we have yet
to see those levels in spite of a 50% decline in the S&P 500.
The Bull/Bear Ratio section of the chart fine tunes the results and
alerts us to lopsided readings even though historical thresholds of
bulls or bears haven't been met. The most recent reading is 2.04. As you
can see, if we are in a bull market as some claim, prices will probably
flatten until some of the bullishness fades. If we are still in a bear
market, which is most likely, much lower prices are probably dead
ahead.
<IMG
src="http://stockcharts.com/commentary/archives/images/cww20021208c-1.gif";
border=0 NOSEND="1">Charts courtesy of <A target=new
href="http://www.decisionpoint.com";>DecisionPoint.com
-Carl Swenlin
Don't forget to visit DecisionPoint's "Top Advisors Corner" for
free, periodic updated from some of the best in known names in the stock
market advisor business. Click <A
href="http://www.decisionpoint.com/TAC/TopAdvisors.html";>here for
the latest postings.
<A
name=arthur>
Biotechs Extend Consolidation
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src="http://stockcharts.com/images/chartwatchers/h_logo.gif"; width=55
border=0 NOSEND="1">
<TD id=header style="COLOR: #ffffff; text-: center" width="15%"
bgColor=#9999cc>TD Trader
There are two patterns at work in the Biotech HOLDRS: an ascending
triangle and a rectangle consolidation. Ascending triangles are
typically bullish continuation patterns, but can also form as bullish
reversals, which would be the case with BBH. Consolidation patterns,
such as rectangles and flags, are typically bullish continuation
patterns, but can also result in a reversal.
Regardless of the pattern, key support and resistance levels are well
defined and future performance is tied to the next break. A move above
92 would confirm both the ascending triangle and the rectangle as
bullish. Conversely, a move below 84 would break key support and be
bearish. As an ascending triangle breakout, the projected advance would
be to around 120 over the next few months (92 - 65 = 27, 92 + 27 =
119).
Look to volume for further confirmation. Volume expanded on the
initial jump from 73 to 92 and declined as the consolidation unfolded
over the last few weeks. This is normal for consolidation patterns and
volume should expand to confirm a bullish breakout. For starters, volume
should at least exceed the 60-day SMA. In addition, a move above +10% in
Chaikin Money Flow could be used for confirmation.
<IMG
src="http://stockcharts.com/commentary/archives/images/cww20021208a-1.png";
border=0 NOSEND="1">
For more of Arthur's intuitive commentary, check out his website:
TDTrader.com Take your TA
to the next level!
<A
name=rhodes>
Tech Rally Coming to an End?
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src="http://stockcharts.com/images/chartwatchers/r_logo.gif"; width=60
border=0 NOSEND="1">
<TD id=header style="COLOR: #ffffff; text-: center" width="15%"
bgColor=#9999cc>The Rhodes Report
As the technology rally has progressed over the course of the several
weeks - and subsequently has failed - many continue to return to the
"tried and true" names such as Intel (INTC), Microsoft (MSFT), Oracle
(ORCL) and many of the down-trodden communication shares just to name a
few. However, we believe this rally is slowly but surely coming to an
end, and that the technology sector high for the next several months may
have already formed. However, if not, then we believe it shall occur in
the next several days to weeks as we are prone to wide time frames due
to markets moving farther and longer than we anticipate.
When one looks at the technicals involving the Nasdaq 100 - one finds
prices have unsuccessfully tested the longer-term 200-day moving average
- a test which may or may not come again...we simply don't know. In
fact, our 40-day stochastic is trading at levels that in the past have
marked a cyclical turning point for technology. And given such, we are
prone to becoming selectively short as our fundamental research
indicates the harsh realities of 2003 have yet to be taken into account.
Thus, we are modestly short...and looking to become even more so in the
very near future.
<IMG
src="http://stockcharts.com/commentary/archives/images/cww20021208r-1.png";
border=0 NOSEND="1">
If you want more of Richard's award winning advise, check out his
website: <A target=new
href="http://therhodesreport.com";>TheRhodesReport.com - Highly
recommended!
New to StockCharts?
<TD id=header style="COLOR: #ffffff; TEXT-ALIGN: center" vAlign=center
align=right bgColor=#9999cc>Useful Links
Here are some links that should help you get started:
<A target=_new
href="http://stockcharts.com/support/GettingStarted.pdf";>John Murphy's
Getting Started with StockCharts.com
<A target=_new
href="http://stockcharts.com/education/What/TradingStrategies/MurphysLaws.html";>John
Murphy's 10 "Laws" of Technical Trading
<A target=_new
href="http://stockcharts.com/commentary/mailbag/mailbag20000824.html";>Chip's
Thoughts on Getting Started with Technical Analysis
All
About Charting and Technical Analysis
<A target=_new
href="http://stockcharts.com/commentary/archives";>Back Issues of this
Newsletter
<A target=_new
href="http://stockcharts.com/commentary/mailbag";>Our Mailbag Column is
full of great tips and advice.
Bored? Check out <A target=_new
href="http://stockcharts.com/SharpCharts/voyeur.html";>our SharpCharts
Voyeur page to see recent masterpieces that other users created on
StockCharts.com
<TD id=header style="COLOR: #ffffff; TEXT-ALIGN: center" vAlign=center
align=right bgColor=#9999cc>Noteworthy
Did you know that the best way you can help StockCharts.com is by
recommending us to a friend? We need your help to spread the word about
our site by forwarding this newsletter to everyone you know. Members -
did you know that you earn one free month of service for every new
subscriber that you refer to our site? You can also help by visiting our
advertisers and by doing all of your Amazon.com shopping via the links
in <A target=_new
href="http://stockcharts.com/education/Resources/Reading/favorites.html";>our
Bookstore. Thanks, we appreciate everyone's support no matter what
form it takes!Questions? Comments? Concerns? Problems?
Suggestions? Simply 'r'eply to this email message and we'll see what we
can do.Take care,
Chip
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