For Nov. 16, 2001
Keep your eye on copper. It is signalling recovery, as is the bond. So too are the RLX and the CYC. Hard to look at these charts and ignore the obvious. They scream at you to pick up some gold stocks for a swing trade as soon as the STO (which is oversold on the daily) turns up.
It is rising long rates that will unravel this rally - but in the meantime it is a very powerful rally indeed. Just look at the chart of the NDX Summation index on Decisionpoint, or compare the accumulation in this rally with the accumulation during the April May rally. No comparison. That said, I stepped aside - out of my long NDX position at the close Thurs. as the internals began to decay and I expect to be able to buy back in lower than Thursday's close by Monday.
I project this rally to hit NDX 1694, but the next hundred points will be labored and choppy as we enter significant overhead supply (bagholders selling at breakeven) from March through August. You traders might want to buy the morning lows and sell the close each day.
I am dying to jump back into the OIH (OSX) as OPEC is teaching the freeloaders a lesson in revenue maximization. Expect the freeloaders to come to their senses quickly once they see that OPEC really means it. We will then get a moonshot rally as Dr. Copper and OPEC discipline join hands. The rate of downward earnings revisions on the OIH are slowing dramatically, so the next rally should carry.
I also stepped aside on my short postion on the bond at the close today, as I expect to be able to sell again at a higher price in a day or two. Looking to sell 107-9 on the Sept. or 106-9 on the March. Will probably sell any turn downward from above 106-17 basis Sept.
Regular chart showing NDX, STO and ACC/DIST. I am getting more agressive about posting trend resumption signals even though they should be obvious, and I will generally go with the earlier of an upturn in ACC/DIST or the STO, as you can see I have done on 11/12. As you can see, this signalling will not be symmetrical, as I have ignored the downturn in the ACC/DIST Thurs. (although not in my own trading).
The 60-40 IT bet projecting to NDX 1694 (QQQ 42.35) before the next serious leg down.
That is all the comments for tonight. Should be back again with more tomorrow night.
The Ole Ygg is not a registered investment advisor. You are responsible for your own investment decisions. Do your own research, and if relying upon advice of others, seek counsel of a registered broker or investment advisor first. The above comments are intended as conceptual discussion of market direction and technical indicators only and are not a recommendation to purchase or sell any particular security.
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