The Play Of The Day
May 2, 2000
09:12 AM EST.
NASDAQ MAY 1, 2000 MARKET RE- CAP & OUTLOOK
Yesterday the NASDAQ, at its high, was within 50 pts. of breaking into 4,000 for the first time since mid April. However, it was unable to make it to 4,000 and only hit a mid day high of 3,982.00, which was up 120 points from its close on Friday, April 28, 2000, of 3,861.00. The NASDAQ composite then fell back to 3, 909.00, which could also be a very key number today, before closing up almost 100.00 pts. at 3,958.08.
NASDAQ MARKET APRIL 5 - MAY 1, 2000 : -
The NASDAQ Ranges From April 5- May 1, 2000, Suggest a Retest of the 3,221.00 Area--In Fact, a Retest is Almost a Certainty!
If we review the past month, beginning with Wednesday, April 5, 2000, the NASDAQ began the day at 4,286.00 before selling off to a low of (*a. 4009.00) and then bouncing off that figure to close at 4,169.00. The NASDAQ composite would then go on to trade up over the next 2 days, Thursday, April 6, and Friday, April 7 and end the week on a positive note to close at its week high of (*b. 4,446.00).
When the NASDAQ composite opened on Monday, April 10, it did so at a high of (*bb 4,475.00.) From that high, it went straight down--more than 240 points to close at it's low of the day at 4188.17. On Tuesday, April 11th, the slide continued as the NASDAQ composite would slide until mid-day and would hit its 5 day low, and now double bottom of (*a. 4009.00) before it would bounce some 179 points higher off its 4,009.00 low to close at 4,188.00. The following day Wednesday, April 12th, the NASDAQ composite opened higher and looked for a time like it would rebound even more, but that was shorted lived as the NASDAQ composite would fall again to (* a. 4,009.00) and this time the area of strong support would be broken, and from there the flood gates would open as the NASDAQ Composite would get crushed when the selling went on fast and furious until the NASDAQ had to be "saved by the bell" and it closed down more than 200 points at its low of the day at (*d. 3,769.00). On Thursday, April 13th, the NASDAQ actually opened a little higher and went on to trade higher going up more than 140 points as it would find buyers once again and go as high as 3,914.00. However, this wasn't meant to last as the late afternoon gave away to selling and the NASDAQ composite not only lost all of its earlier day gains, and once again as it had just one day prior, it closed at its low of the day at 3,676.00.
On Friday the NASDAQ was trading up in pre market as it awaited a very key economic indicator which also acts to control inflation, the March 2000 Consumer Price Index ( CPI). It hit the market like a lightning bolt as it came in way over estimates and the NASDAQ composite would drop dramatically all the way to (*e.3,375.00) before it would bounce. And, as Allen Greenspan talked (ad infinitum as usual) during mid day it would go back to as high as (*f. 3,522.00), bouncing more than 145 points. However, it was a "dead cat bounce" indeed as it gave the Market Technicians, who had been short since March 21, 2000, more room to short and they proceedd to flood the market into the last hour with additional supply. Thus, the NASDAQ composite had no answers in the form of buyers as investors would rush to the exits on earlier day gains and hammer the NASDAQ composite lower reaching a low of 3,265.00. At about 3:36 PM EST., the NASDAQ composite would bounce off that day low of 3,265.00 to close at what was formerly a double bottom close, which had taken place on Dec 1- 2 of 1999 at (*j. 3,321.00). And so the week would end that saw the NASDAQ hit a high on Monday, April 10th of (*bb. 4,475.00) only to lose 1210. 00 points to its low of the week at (*h.3,265.00). This frenetic week set the stage for a most tenuous weekend full of anxiety and worry about what the NASDAQ had in store for the upcoming week.
The NASDAQ composite futures were down big in pre market on Monday, April 17 as it would set up an open on the NASDAQ at its 200 day low of (*i. 3,221.00). At this point the NASDAQ was down over 36% off its all time high closing number of (j*5,047.00) reached less than 6 weeks earlier on March 9, 2000. At this juncture the NASDAQ composite had also lost 1,911.00 points off its all time intra day high--reached on March 10, 2000 at (*p. 5,132.00) After beginning at its day low of 3,221.00 the NASDAQ would bounce big as investors finally were willing to go in and buy Tech and Internet related issues that had fallen in some cases more than 40% off their all time highs reached just one month prior. The NASDAQ composite would add on more than 300 points-- its biggest one day point gain ever-- as it had more than proven it could bend, but not break and closed at its high of the day (*k. 3,593.00). Over the next 2 days the NASDAQ would trade higher on Tuesday, April 18 until a NASDAQ leading big cap Intel (NASDAQ:INTC) reported better than expected numbers, but then saw a "tight supply " for the remainder of 2,000. This once again set up a sell off for the following day as INTC lead the action and was hammered lower by more than $9.00 on Wednesday, April 19th until it reached a 5 day high of (*p. 3,851.00). On Thursday, April 20th the NASDAQ headed into a much deserved 3 day weekend owing to Good Friday on Friday, April 21st the NASDAQ would trade in a fairly wide range as Thursday, April 20 would serve as the April expiration on the NASDAQ futures, as well as the NASDAQ options ( double witch). In light of these expirations and the fact that many traders and investors had left early for a 3 day weekend, the NASDAQ lacked buyers after positions were closed early in the morning taking the NASDAQ to a low of 3,599.00 before it would close down at the shorted week down on the day (*L. 3,643.00. Microsoft (NASDAQ:MSFT) would report its much anticipated 4th quarterly numbers. MSFT would beat the street by 2 cents, but would not come close to the rumored 4 cents and Mr. Softie would also warn of a swing in computer sales during the summer months of 2,000. The NASDAQ composite now had its excuse that would serve as a catalyst for a drop as it began the week on Monday, April 24th. The NASDAQ would open with its July Futures locked down as it opened the day down 177 points off of Thursday's close (the previous week's last trading day) at (*m. 3,466.00). The NASDAQ would drop another 121.00 points until it hit its 5 day low of (*z3,345.00) before bouncing back some 258 points off its lows to close at 3,711.00. As the week continued the NASDAQ would trade up all week long as it would close on Friday, April 28, the last day of an April 2,000 and what would be recorded as the most volatile month in NASDAQ history. The NASDAQ, also upon Friday's close, recorded only its 2nd day range of less the 100 points in the month of April 2,000 (from high to low which was up 86.00 pts. to 3,873.00).
Yesterday, May 1, 2000 the NASDAQ began its first trading day in May right where it had closed the month of April as it would open up 55.00 and go on to trade up 121.00 points in mid morning, reaching an intraday high of (*n. 3,982.00) before it would give way to some profit taking as the NASDAQ had continued its 4th straight day of gains going to an early afternoon low of (*o. 3,909.00). Then, it would once again rally to go back as high as (*q. 3975.00) up 114.00 points, before it would close on its lowest volume in over 4 weeks of only 1.455 bill shares trading in the NASDAQ composite up 96.00 at 3,958.00.
THE NASDAQ Composite Finds 3221,00 Before it Breaks 4009.00 Again
HOW THE NUMBERS & LETTERS TELL THE STORY FROM 3,975.00 BACK TO 3,221.00 ! UPCOMING
April 5, 2000 - 4,288 -a. 4,009 (4,009 double bottom corresponding with the low on April 11, 2000)
Then, at the low of *i. 3321.00 reached on April 17, 2000, the bounce back was to as high as 3,851.00 on April 19. Then, the NASDAQ went as low as 3,345.00 on April 24. Then, as recently as yesterday, it went all the way to what I am saying will be the high for now-- 3,982.00-- before it fell back to 3,909.00 and then (o. 3,975.00) which was the bounce before it closed yesterday at 3,958.00.
THE EQUATIONS THEN: The NASDAQ adds on 124.00 more and this bounce will drop 124.00 the NEXT (predicted bounce) to find 33221.00 and access a double bottom.
o. 3,975.00 - p.3,851.00 = 124.00
z. 3,345.00 - (that ) 124.00 = i. 3,221.00 (DOUBLE BOTTOM would then be HIT!)
(Even if we use 3,982.00 which is yesterday's high on NASDAQ 3,982 - 3,851 = 131.00
3,345.00 -131= 3214.00 . Also, that bounce yesterday of 3909 is 100 off the NASDAQ current double top off 4009.00. Then take the close April 14, 2000 the double bottom as well on Dec 1-2, 1999 of 3321.00 that is 100 off NASDAQ 200- day low 3221.00
IT LOOKS LIKE THIS:
4,009.00 -NASDAQ double bottom once lost; it slid (to guess where?) 3,221.00
3,982.00 yesterday's high
3,975.00 yesterday's key number
3909.00 yesterday's mid day bounce then a high back to 3909
3,958.00 yesterday's close
3,345 the current 5 day low
3,321.00 the close on April 14th and double bottom close dec. 1-2, 1999
3,221.00 NASDAQ current 200 day and 30 day low ( reached April 17, 2000)
3,214.00 numbers say we bounce here?
3,121 is 41% off the all time NASDAQ high--both the NASDAQ crash of '87 and the NASDAQ drop of '98 on the net stock recovered no lower than here! L'histoire se repete!
THE REASONS: Why 3,221.00 Seems to be in The Cards other Than Just Numerical Data
VOLUME IS KEY -
The NASDAQ low volume of last Wed, Thurs. and Friday continued to a low of 1.455 bill yesterday. Stocks such as JDSU and YHOO and QCOM all traded much much less than they did even one day prior. The reason is quite simple as the Market Technicians didn't want to short anymore stock on fear the NASDAQ would be short squeezed to break 4009.00. Therefore JDSU, a stock that normally trades over 22M and traded 19M on Friday traded less than 15M yesterday. It also traded low volume on the fact that investors had made so much since its low on April 24 and also because they hadn't seen to much of a loss as well.
How about that--Mary Meeker sets up MSFT to drop! Futures up 10.00 when i came in at 4:05 AM EST-- to go down now to 40.00 off
2. ECONOMIC INDICATORS:
The last CPI and ECI reports were high. The upcoming Productivity Numbers out on Thursday, May 4, 2000 at 8:30 AM EST. As well as the Employment Numbers for April 2000 and the FED will look at close to a .50 rate increase. Both upcoming events should be to the strong side and may indeed rock the market. We will be looking for heightened unit labor costs. It may result in a .50 rate hike.
Also Today's Housing Numbers!
FED INTEREST RATE MEETING (Economic information indicates .50 raise may be needed to slow down growth).
The NASDAQ was trading at an all time high of 5132.00 on March 10, 2000. Upon hitting that number the volume slowed, as it has of late, indicating a top has been reached. It then sold down about 11 market days ahead of the FED'S last meeting when Interest Rates were increased at the last meeting of March 22, 2000. The NASDAQ dropped ahead of that increase to go all the way from 5132.00 to a low of 4446.00 on March 21,2000, one day ahead of the Wed March 22 raise of .25 basis points. The resultant market drop was 686 points to adjust then for that FED increase.
The NASDAQ then went up the next 4 days in a fast, low volume move (Shorted market as Market technicians went short) (proven now as market was crushed 2 days after hitting 5,000 for second time. April 4th 3,652.00 hit intra day low) back to 5,000. The move it made following that high was indeed a shorted market as the market technicians had shorted the NASDAQ heavily on March 21, 2000.
That drop of 686 points set up . 25 increase. If we now drop off a high of 3982 yesterday back to 3221.00 testing that low we saw in April 2000, we will lose 761 points. I like us to test that low as predicated. However, I like a bounce back up to 3,466- 3,522.00 ahead of the FED on May 16, 2000. I then like the Market to bounce off 3375.00 and then on the increase drop to 3321.00. Yesterday's high of 3982 sets up the FED increase induced drop which will about 686 points again. Recent history on the NASDAQ tells us that 3321.00 should be a good May 15, 2000 or May 16, 2000 low. Remember each .25 increase is worth 500, then so we drop and adjust the rebound as we go on .
In sum, the Stockjock at www.bigplaystocks.com predicts a
LOW of 3221.00 between now and May 16, 2000
Predicted to take place May 15 or 16, 2000
Predicted May end on NASDAQ: 3,655.00 to 3,769.00
Today's Play of The Day is: NASDAQ 100 Tracking Stock (NASDAQ:QQQ)
In what I see as the drop to test 3,221.00 upcoming the best bet to no doubt drop with the NASDAQ as it is its tracking stock is the QQQ's.
KEY INDICATORS: QQQ (SHORT)
RUN THE OPTIONS! QQQ
The May 80's look best to set up big yardage gains as a 3,221.00 test awaits!
SJ's 2nd Play from Scrimmage Today DEEP THREAT GAINER! Yahoo! (NASDAQ:YHOO) SHORT-
YHOO was at a April 24 opening low at 3,345.00 of 113.00. YHOO then went went to 136.00 over the next 3 days into Friday, April 28 to a high of 131.8750 before it closed last week at 130.25. Then YHOO yesterday on increasingly low volume gap up open of 55,000 shares opened at 134.50 then went as high as 136.00. Before closing at exactly Friday's high of 131.8750.
YHOO now sets up to retrace this pattern: YHOO 136 -113 =23.00
then yesterday's high move 136 minus that number is 106.25. I like YHOO to see 107.00 - 106.50on a retrace to 3221 over the next 6 - 10 days ahead of FED May 16, 2000.
KEY INDICATORS: YHOO (SHORT)
Sell Short Area: $133.00-$ 129.50
Cover For a LOSS: $138.00
Time Frame: before May 16, 2000
Type of Trade: Swing Trade
RUN THE OPTIONS- YHOO
The May YHOO 110 puts
SJ's OTHER SCRIPTED PLAYS:
UBID - Short to 15.00
LPTHA Short to 14.00
PWAV Short to 110.00
MACR Short to 55.00
CMGI Short to 52
IFCI- Short to 13.00
NTRX- Short to 10.00
ANCR -Short to 15.75
John "STOCK JOCK! " Your QB Clean Up Hitter! Gaol Minder-Shooting Guard and "The Guy that Guy That Keeps You all in The Game! -- and Host of BigPlayStocks.com!
Marc "SAGO" SJ number 1 Option! "The best when it comes to seeing short term gains, and big moves. His best attribute is perhaps many of the failing daytraders worst. He isn't greedy and never looks back!" His favorite saying "A gain is a gain NEXT!"
THE REST OF BPS.com STARTING LINE UP- PRO TRADING TEAM:
Matt -MATEO "A options wizard"
Brian SONOMA "A range player guru"
David DAVID "a true market technician"
Martin "keep a close eye on all the action"
(Today's BONUS PLAYS are provided by SAGO He is BULLish on this market as today begins so he set ups his plays today like this!)
BONUS PLAY # 1 Ocean Energy, Inc (NYSE: OEI)
Ocean Energy, Inc. is one of the largest independent oil and gas exploration and production companies in the United States. The Company holds a diversified portfolio of properties with both domestic and international exposure organized into three operating units, Gulf of Mexico, International regions and Onshore North America. North American operations are focused in the shelf and deepwater areas of the Gulf of Mexico, the Permian Basin, Mid-Continent and Rocky Mountain regions. Internationally, the Company explores for and produces oil and gas in Angola, the West African nations of Côte d' Ivoire and Equatorial Guinea, Egypt, the Russian Republic of Tatarstan, Pakistan, Yemen and Indonesia. On March 30, 1999, Ocean Energy, Inc. merged into Seagull Energy Corporation, and the resulting corporation retained the name, Ocean Energy, Inc.
Stock fans, this sector is the one, leading the pack in making new highs. The industry group has moved up in the weekly ratings from 65 to 18 and is now in 9th place.OEI's volume has increased for the last several days. It has formed a nice base and looks to breakout to new highs. Before I go with the numbers, I also like ENE and CHK in this group. Ocean Energy has a RS rating of 82 and a EPS rate of 76. Earnings have grown over the last 4 quarters 209%, 187%, 214% and 101%. Sales look just as pretty. All this and a $13.50 stock. Looking to ride the wave with the Ocean Energy boys.
KEY INDICATORS: OEI
Buy Area:$13.25 to $13.65
TARGET:$15.00 to $15.70
Time Frame: 3 to 5 days
STOCKS ON SJ SHORT TERM BEARISH SCREEN to test 3,221.00 today as Swing Trades!
QCOM- Short to 92.00
CMGI Short to 55.00
DCLK Short to 52.00
MACR Short to 55.00
NITE Short to 30.00
GWRX- Short to 16.00
INSP - Short to 40.00
EBAY- Short to 122.00
ORCL Short to 62.00
CSCO- Short to 56.00
INTC - Short to 108.50
Have a Great Day!
See ya on the FIELD!
SJ! and BigPlayStocks.com TEAM OF PRO TRADERS!