Market Talk

[John M]

Here is my COMPX daily from 8/9/01

notice what I believe to be the breakdown of the sym triangle to the norm... and the head and shoulder formation target of 1824


http://stockcharts.com/snapshots/1220329.png


and this is my updated daily to 8/27/01


http://stockcharts.com/snapshots/1352163.png


I now believe that the COMPX has a chance to rally back to the 50% re-trace area at 1974 for these reasons...

1)Delta hedgers continue to unwind short postions

2)Retail Short covering begins to panic and lock in profits at any price

3)End of month mutual fund "window dressing"

4)The fact that the earnings warning period for Q3 won't begin in earnest for another 1 1/2 to two weeks..no news could be good news

I won't even get into the possibility of bigger manipulations regarding FED repo's and distorted statistics in an effort to prop the market, and I won't be getting long on the possibility of catching this rally.

Rather I believe this possible rally could drive sentiment and complacency levels to extremes, resulting in an excellent risk reward scenario from the short side.

Good Trading to all,

John M.