Good Morning all
This rally yesterday on the surface looked terrific right? WRONG! Yesterday on P&F the internals were the worst I've seen this year and maybe in 10 years. What i mean is we have 1 or 2 possible answers to what transpired internally on the bullish percents. There was an incredible sell off as stocks on the sell side muderlized stocks on the buy side. The incredible force of sellers yesterday pushed the NYSE OTC & OPTI BP's down about an average of 4%. Now either that was the capitulation sell day? Or, there is gigantic carnage yet to come. About 3-4 weeks ago i called for this correction knowing full well we were coming down hard. I mentioned to you all about the "speed" of this next down move. There is a simple scenario for Point & Figure chartist like me. When the main BP's are in O's together that's when we flush out the stock market since it always happens that way over time. The idea that investors could hang in there and do nothing was absurd to me. Now as we all see this massive selling even on 286 up days on the DJIA we may have NOT seen the lows of this move. I wrote to you all about the "potential" if we break 13,000-13,100 on the charts the next move down would be toward my ultimate target of 12, 650. So let's not get too lathered up just yet, let's not push cash into the markets just yet, there's going to be a period of backing and filling at certain levels "once the momentum stops" moving lower. That has not happened yet folks so this is NOT the time to invest. We'll talk about that soon enough it's coming to a conclusion rapidly but we must preserve capital at all costs. Now we do have 4 bright spots in the short term indicators they are getting washed out and plunging into the green zone, the buying zone. We must wait for a reversal back up or a waning in the downward pressure on the bp's. Until then we sit and wait patiently for this phenomenon to happen and then dive into the abyss. Today is the FOMC meeting, of course no interest rate change is in the cards but the Dec Fed Funds Futures are predicting 100% cut in rates. It is my contention the Fed has to change their statement to "SIGNAL" THE MARKETS THEY ARE READY WILLING AND ABLE TO CUT RATES IF NEEDED. As they say in the vernacular the balls in there court. So we stand pat, we wait for signs of life and we do some due diligence for our shopping list.
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CSCO---29.80 THE BTL---29.20 THE SST---HAS EARNINGS TONIGHT AND THEY HAVE REALLY EXECUTED QUITE WELL LATELY
NFI---7.40 THE BTL---6.90 THE SST---THEY CAME OUT YESTERDAY WITH A VERY POSITIVE BLURB AND EXPLODED UP
ATVI---19.95 THE BTL---19.30 THE SST---VOLUME HAS INCREASED ON THIS STOCK IT'S TRYING TO GET TO NEW 52 WEEK HIGHS
QID---45.60 THE BTL---45.00 THE SST---TOUCHED A DOUBLE TOP AT 47.00 THEN SELLERS HIT IT HARD IT'S GOING LOWER
CROX---55.45 THE BTL---54.80 THE SST---DUMPED EARLY AS EXPECTED AND CALLED BUT IT'S STRONG FOLKS WATCHING
VDSI---29.45 THE BTL---28.80 THE SST---SLAMMED EARLY THEN HAMMERED AND RALLIED UP NICELY INTO THE CLOSE
SMH---37.80 THE BTL---37.20 THE SST---THE SEMIS DID VERY WELL YESTERDAY BUT NOT WHAT I EXPECTED SO BE COOL
ANDE---46.20 THE BTL---45.65 THE SST---VERY NICE ETHANOL & OTHER STUFF TYPE STOCK THE CHART IS VERY SOLID
LRCX---57.80 THE BTL---57.20 THE SST---UP BIG YESTERDAY HAS A MIRROR IMAGE ON THE DAILY CAN FLY IF WE GO UP
LDK---39.70 THE BTL---39.10 THE SST---ANOTHER SOLAR TYPE NAME WITH UPSIDE POTENTIAL MOVES IN BIG JUMPS
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OK THE FED'S ANSWER COMES AT 2:15 TODAY. NO CHANGE IN RATES!, BUT A CHANGE IN THEIR STATEMENT WITH A MOVE "OFF" INFLATION TO A MORE DOVISH CALL HERE. THEY ARE NOT GOING TO DO ANYTHING HERE, BUT LET THE STREET KNOW THEY ARE THERE TO HELP.
THE MARKETS "SHOULD" LIKE THIS TYPE OF MOVE. THE QUESTION IS THIS. HOW WILL THE REACTION ON THE STREET TAKE THIS WORDING. WE WAIT AND SEE, WE DO NOT SPECULATE WE DO NOT GUESS WE DO NOT PREDICT.
SEE YOU IN THE ROOM
JERRY
Jerry Olson
The Jog Group LLC
jerryo34@verizon.net
