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us stock market, stock market today
Begin part 2 of 3
SUBSCRIBER QUESTIONS
Q: I enjoy reading your commentary each day. Besides the technical aspect you have a knack for putting across your point in a very understandable manner. With all the hype about sentiment being bearish and everyone wanting to be a contrarian, is it possible that this time IS "different." It seems that the leaders are performing much better than in the past bear market rallies and the resistance levels are being knocked off one-by-one. Since I don't have access to all the technical information I was wondering if you could compare today with other major market bottoms. Was the sentiment this bearish then and how were the leaders performing? Thanks.
A: Glad you enjoy the commentary and that it is understandable. Your points are well taken and your observations about leadership and resistance levels broken are accurate. Markets cannot sustain a rally if money is not being pushed into sectors and stocks that have solid earnings growth and earnings potential.
With respect to other market bottoms, the action is very similar. In 1974 for instance, the economic outlook was horrible: recession; energy crisis; new environmental laws costing billions of dollars (similar to today's cost of homeland security); inflation combined with unemployment, something that was not supposed to happen according to the Phillip's Curve model the Fed still uses; lack of business investment. It was bad and only expected to worsen according to some very smart economists of the time. Same with the market; it was trending lower and lower, and with the poor economic outlook, there was no sign it was going to get better. Again it was the idea that the economy needed to improve before the market would respond instead of the historical reality that the market would bottom and improve before the economy showed any signs of recovery.
Even with the negative views the market bottomed and started higher with a double bottom pattern very similar to what we have seen in July and October 2002. The economy was still in trouble. Jimmy Carter was elected based on the 'misery index' of inflation plus unemployment. Yet things did not show much improvement for the rest of the 1970's. It was not until the Emergency Economic Recovery Act of 1981 that slashed taxes and encouraged massive business investment that the economy really beat inflation and exploded higher. The issues may not be identical, but the parallels between the major items then and now are striking. The patterns of the indexes are striking. The predictions of further economic turmoil of cataclysmic proportions is striking. Things may seem different but they really are not. Thus this rally out of the downtrend may indeed really be different from the others not only for the attributes it is showing on its own, e.g., accumulation, leadership, and breadth.
SEMINARS ON CD
http://www.stockseminarsonline.com
This is Jon Johnson's own site devoted exclusively to seminars designed to teach you what you need to know about the stock market and stock movement and how to take advantage of those moves without incurring the usual high costs of travel and related expenses usually associated with seminars.
THE PLAYS
Good Friday movers: ADTN; ARTI; CYPB; FDX; FFIV; GPRO; IGLD; NENG; NSM; REDF; WFII
NEW PLAYS:
Play Date: 05/10/2003
BCR (C.R. Bard--$63.39; +1.7; optionable): Medical instruments. http://biz.yahoo.com/p/b/bcr.html
STATUS: Ascending triangle. For the past 1.5 years BCR has worked through a cup base and the stock is now back up to the high in the base, moving through a 2-month ascending triangle. Since November it has put together solid 8 to 3 accumulation, using the 50 day MVA (61.48) as the support in the base as it moves toward a breakout over 64. The long term pattern for BCR the past 4 years is a large ascending triangle that has used the 200 day MVA as support. After a lower volume test of the 50 day once again, BCR made a higher low Friday, starting back up on a strong volume surge. Solid accumulation, solid money flow, and it looks as if BCR is ready for that new high.
Volume: 369.7K Avg Volume: 317.818K
BUY POINT: $64.25 Volume=477K Target=$73.75 Stop=$61.55
POSITION: BCR JM - Oct. $65c (44 delta) &/or Stock
http://www.investmenthouse.com/ct/bcr.html
Play Date: 05/10/2003
OVRL (Overland Storage--$17.52; +0.13; optionable): PC data storage devices
http://biz.yahoo.com/p/o/ovrl.html
STATUS: Testing the breakout. OVRL blasted out of a 3-month flat base in April and is now working laterally along the 18 day MVA (17.35) testing that move. Volume has been below average on the move and Friday OVRL reached well below the 18 day and then rebounded on rising though still below average volume. Nice doji. Nice accumulation at 6 to 0 since January. Nice money flow moving up ahead of the stock. The rising volume Friday indicates the bounce back is coming.
Volume: 77.282K Avg Volume: 86.363K
BUY POINT: $18.05 Volume=125K Target=$21.68 Stop=$17.05
POSITION: QOJ HW - Aug. $17.50c (57 delta) &/or Stock
http://www.investmenthouse.com/ct/ovrl.html
Play Date: 05/10/2003
SMTC (Semtech--$17.2; +0.71; optionable): Semiconductor integrated circuits
http://biz.yahoo.com/p/s/smtc.html
STATUS: Cup w/handle. SMTC is coming off the bottom of its long decline, rallying to 18 in December and then forming the current 5.5 month base. Friday SMCT started moving higher off the 18 day MVA (16.38) on a strong shot of above average volume. Accumulation is positive at 4 to 3 during the base. SMTC looks ready to give a nice gain here that we want to take advantage of. We may not hold it forever, but it can really move when it starts.
Volume: 1.31M Avg Volume: 1.243M
BUY POINT: $17.48 Volume=1.9M Target=$21 Stop=$16.26
POSITION: QTU IQ - Sept. $17.50c (56 delta) &/or Stock
http://www.investmenthouse.com/ct/smtc.html
Play Date: 05/10/2003
UIS (Unisys--$10.83; +0.02; optionable): Information technology software
http://biz.yahoo.com/p/u/uis.html
STATUS: Cup w/handle. UIS is another stock that has put together a good move off of its bottom. It formed a double bottom in the July and October lows, broke out, and is now working on breaking out of a 4.5 month base showing excellent 8 to 3 accumulation. Volume has surged the past week as UIS made the start of the breakout move. UIS looks ready to follow its money flow higher and we are going to step in when it does.
Volume: 941K Avg Volume: 1.088M
BUY POINT: $11.05 Volume=1.6M Target=$13.25 Stop=$10.38
POSITION: UIS JB - Oct. $10c (67 delta) &/or Stock
http://www.investmenthouse.com/ct/uis.html
CONTINUING PLAYS:
Play Date: 04/02/2003
ADBE (Adobe Systems--$36.55; +0.61; optionable): Application software
http://biz.yahoo.com/p/a/adbe.html
STATUS: Testing the breakout. ADBE made the breakout from its cup with handle in March and has moved up the short term MVA since. Volume finally really started to flow into the stock the over a week back as it made a strong break higher. It has come back on low volume and has tested the 18 day MVA (35.55). Friday ADBE started higher. What we want to see is some stronger volume as it starts higher.
Volume: 2.606M Avg Volume: 3.615M
BUY POINT: New: $36.94 (orig. $34.12) Volume=4.8M Target=$41 Stop=$35.42
POSITION: AEQ GF - July $30c (69 delta) &/or Stock
http://www.investmenthouse.com/ct/adbe.html
Play Date: 03/04/2003
CY (Cypress Semiconductor--$10.18; +0.33; optionable): Semiconductors
http://biz.yahoo.com/p/c/cy.html
STATUS: Testing the breakout. CY has delivered excellent returns for us and is now testing the 10 day MVA (9.85) after a strong, high volume break higher in early May. Friday it tapped the 10 day MVA on the low and started back up on some strong, rising volume. We are looking at additional positions on this successful test.
Volume: 4.378M Avg Volume: 2.049M
BUY POINT: New: $10.35 (orig. $6.70) Volume=2.3M Target=New: $12 (orig. positions: $8.65) Stop=$9.48
POSITION: CY IB - Sept. $10c (60 delta, low OI) &/or Stock
http://www.investmenthouse.com/ct/cy.html
Play Date: 05/08/2003
EPIC (Epicor Software--$2.86; +0.01; no options): Application software
http://biz.yahoo.com/p/e/epic.html
STATUS: Flying plateau. EPIC continues to work in the flying plateau as volume continues to drop and the stock sits right on top of the 10 day MVA (2.80). The 10 day MVA should help send it higher. Solid accumulation and money flow.
Volume: 47.55K Avg Volume: 83K
BUY POINT: $3.02 Volume=145K Target=$3.88 Stop=$2.74
POSITION: - Stock (no options)
http://www.investmenthouse.com/ct/epic.html
Play Date: 04/23/2003
FFIV (F5 Networks--$15.44; +0.81; optionable): Internet software and services
http://biz.yahoo.com/p/f/ffiv.html
STATUS: Ascending Triangle. FFIV is making the breakout, rallying Friday on rising though still below average volume. Looking for more volume as it pushed higher in the continued breakout. Solid 7 to 3 accumulation in the base.
Volume: 488.277K Avg Volume: 486.318K
BUY POINT: New: $15.65 (orig. $15.30) Volume=750K Target=$18.32 Stop=$14.05
POSITION: FLK GC - July $15c (52 delta) &/or Stock
http://www.investmenthouse.com/ct/ffiv.html
Play Date: 05/08/2003
FLIR (Flir Systems--$51.87; +1.19; optionable): Scientific and technical instruments. Splits 2:1 on 5-30-02
http://biz.yahoo.com/p/f/flir.html
STATUS: Testing the breakout. It was a pretty hard drop from the nice breakout, but FLIR held the 18 day MVA (50.65) and has started back up. Volume has yet to follow. We are looking for more volume for additional positions on this bounce. We really like successful breakout tests, and rising volume would make this a success.
Volume: 239.255K Avg Volume: 262K
BUY POINT: New: $52.05 Volume=401K Target=$58.75 Stop=$49.65
POSITION: FFQ GJ - July $50c (57 delta) &/or Stock
http://www.investmenthouse.com/ct/flir.html
Play Date: 05/06/2003
HYSL (Hyperion Solutions--$29.98; -0.21; optionable): Application software
http://biz.yahoo.com/p/h/hysl.html
STATUS: Cup with handle. Looking very good in the handle of its 3.5 month base, HYSL is pulling back on low volume in a very orderly manner, refusing to give a large loss. We look for it to make a strong move earlier this week on some big volume as the solid 5 to 3 accumulation and money flow kick in.
Volume: 350.795K Avg Volume: 690.272K
BUY POINT: $30.83 Volume=1M Target=$37 Stop=$28.67
POSITION: WQE HF - Aug. $30c (57 delta) &/or Stock
http://www.investmenthouse.com/ct/hysl.html
Play Date: 04/30/2003
LEXR (Lexar Media--$5.34; +0.15; optionable): Photo equipment
http://biz.yahoo.com/p/l/lexr.html
STATUS: Testing the move. Still looks very good in the test of the breakout. Friday LEXR was up on rising though still below average volume. Looks very good and money flow is just excellent. Looking for the stock to follow it.
Volume: 730.952K Avg Volume: 874.09K
BUY POINT: New: $5.25 (orig. $5.06) Volume=1.2M Target=$7 Stop=$4.97
POSITION: EQG IA - Sept. $5c (58 delta) &/or Stock
http://www.investmenthouse.com/ct/lexr.html
Play Date: 03/20/2003
LLTC (Linear Technology--$36.34; +1.33; optionable): Semiconductors
http://biz.yahoo.com/p/l/lltc.html
STATUS: Cup w/handle. LLTC has moved out of its cup with handle and is now forming a short ascending triangle on top of that prior base, rising up the 18 day MVA (34.84) as it makes higher and higher lows. Friday LLTC was moving toward the breakout on rising, average volume. We are looking for the next breakout this week to add to positions. This stock could really fly on the breakout.
Volume: 7.148M Avg Volume: 6.67M
BUY POINT: New: $36.75 (orig. $34.97) Volume=7M Target=$40.48 Stop=$34.55
POSITION: LLQ HZ - Aug. $32.50c (63 delta) LLQ EZ - May $32.50c (66 delta) &/or Stock
http://www.investmenthouse.com/ct/lltc.html
Play Date: 05/03/2003
NBIX (Neurocrine Biosciences--$46.84; +0.04; optionable): Biotechnology
http://biz.yahoo.com/p/n/nbix.html
STATUS: Cup w/handle. NBIX continues in the handle of its 5-month base showing good 4 to 2 accumulation. Friday NBIX tapped right at support at 46 and then bounced back up on strong, above average volume. The candlestick pattern was a doji; that often signals a test is over. Looking for a strong breakout with the money flow rallying up ahead of the stock.
Volume: 477.096K Avg Volume: 385.863K
BUY POINT: $48.20 Volume=600K Target=$54.25 Stop=$45.96
POSITION: UOT HI - Aug. $45c (64 delta) &/or Stock
http://www.investmenthouse.com/ct/nbix.html
End part 2 of 3
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us stock market
stock market today
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