wmeubank@ocp.kcmo.com
COMMODITY REVIEW AND OUTLOOK
195 Route 6A, Suite 6, Orleans, Massachusetts
(November 21, 1997) STOCK INDICES: S&P 500–SHORT TERM–Selling in Asian and South American stock markets continue to weigh on U.S. markets. The bankruptcy of Japan's Yamaichi Securities Co. Ltd. is not positive, and suggests more problems, not fewer. If we're finding these problems in Japan, one can only wonder what will be presented to us by some of the other emerging nations. I don't think it will be free checking. While all the mavens and gurus on TV tell us what a bargain today's market is (“By Christmas, no one will even remember this” is more or less what I heard at least twice.), trust your own sense. Do the indices seem like a buy? Or, to put it a better way, are things more bullish now than they were a month ago? Not on my score card. Individual stocks may go up, but I suspect that the long bull market in the indices is now really over.
RESISTANCE–Resistance basis Dec. is near , 952, 956, 960-962, 965-970, 976.
SUPPORT–Support is near 947, 941-944, 924-932, 871-869, 862-860, 851, 846, 835, 830, 821-818, 801.
RECOMMENDATION–Stay cautious, and if not very aggressive and well capitalized, stay out. Traders should probably treat the market as a range for now. Aggressive traders might treat rallies to 956-962 area as a selling zone. There is a chance that the market could rally to the mid 970's, but I still suspect it can't hold. Look for a break back to the mid 920's-mid 930's, although the 940's may offer support. Use stops or trade options. Option traders should buy near the money puts on rallies. Long-term objective is a test of nearly 800 basis the nearby.
M. Steven Morgan
|
|
Hosted by:
One Crossroads Place
610 West Maple Ave, Suite WWW
Independence, MO 64050
(816) 252-4080
sysop@kcmo.com