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All,
AOL, BBY, and C all fell through the bottom of their up trend channels
and are headed down towards the next longer term up trend channel so I
cancelled my Buy Stops. I'll have to wait until they get close to the
bottom of the next longer term channels before I try again.
I thought that with all three of them failing to hold, the market may
be in for some more bad times. However, the NASD OTC, OEX, and SPX indices
are all near the bottom of their Intermediate Term Up Trend Channels
(ITUTCs). If those channels hold, we should see an upturn some time this
week. If they don't this could turn into a major correction. In either
event, I'm glad that I switched my entry strategy to this method that
requires up movement through a buy stop to enter a new long position. I
believe it will cut down on the number of false signals and still let me
catch most of the move when the signals are right. This week I'm going to
try CISCO Systems (CSCO) and MCI Worldcom (WCOM) both of which have fallen
to the bottom of their ITUTCs.
CSCO at 108 1/2 is in an ITUTC with the top at 142 and the bottom at
105. It has made a triple top just under 120 with a 4 month sideways move
that took it from the top to the bottom of its ITUTC. The PDI minus MDI has
been oscillating around the zero point while the ADX just tuned up from 15.
This looks like it is building towards an up move. I'm going to set a Buy
Stop just above Friday's high at 110 1/4. If I get it, I'll set my target
at 142 and my stop at 104 3/4.
WCOM at 87 1/8 is in a standard deviation ITUTC. The top (dev at 2) is
at 127.8 and the bottom (dev at 1) is at 85.93. It has also been in a three
month sideways move from an all time high to the bottom of the channel. The
PV binary wave is just positive and flat while the Tema StochRSI(21) is
negative and rising. Another buy signal set up - I hope <G>. I'm going to
set my buy stop at 88 3/4 which is just above Thursday's high. If I get the
position, I'll set the target at 127 and the stop at 85 3/4.
I'll send CSCO.GIF and WCOM.GIF charts to everyone on the chart email
list.
JimG
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