wmeubank@ocp.kcmo.com
COMMODITY REVIEW AND OUTLOOK
195 Route 6A, Suite 6, Orleans, Massachusetts
(December 11, 1997) STOCK INDICES: S&P 500–SHORT TERM–Mutual fund selling (now that's a change) and ongoing weakness (just a glitch) sent the S&P through near-term support. News that J.P. Morgan is experiencing difficulties due to the Asian problems also sent the market into a tailspin. I suspect they are only one of many. How do you think the next few earnings reports will read? This suggests to me that plenty of profit-taking will be occurring on the rallies. Losses in blue-chip stocks and tech stocks combined with a less-than-robust bond market are adding to the dubious tone. The market is focused on the Asian bailout plans, especially for Japan and South Korea.
RESISTANCE–Resistance basis December is near 960, 968, 971, 977, 980-983, 991-992.
SUPPORT–Support is near 955, 947, 941-944, 924-932.
RECOMMENDATIONS–Stay cautious, and if not very aggressive and well capitalized, stay out. We have moved into moment of truth territory. Aggressive traders could continue to sell in the mid 960's, mid 970's with stops over 983 or of 300-500 points. Look for a test of the low 950's. Very aggressive sellers could consider the low 960's.
M. Steven Morgan
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