wmeubank@ocp.kcmo.com
TRIESTER ON THE MARKETS-OSPREY TRADING
111 Presidential Blvd., Ste. 230, Bala Cynwyd, PA
(March 28, 1997)
S&P 500 INDEX:
The Dow recovered a bit to exceed 6900 on strong buying in many key
issues. Bonds have fallen 36 tics to 108- June. The new up leg started
at 782.55 basis S&P March. This was expected as the intermediate trend
lapsed into a correction in February. The S&P dropped to the 787.50
mark this week, dropping impressively on Thursday with a 1000-point drop
in the last two hours. The trend is now down intermediate. The trade balance
news and CPI sunk the bonds and stocks on Wednesday as S&P lost 4 plus
points on the day Thursday. We dove 600 points on Monday. The bull of 1997
has cooled off for now. Professionals are short for the short-term here
as bond yields rose to 6.97%. Look for 7.0% to hold or else stocks will
be stung. The economic numbers still show a recovered economy and inflation
in single digits. Greenspan warned of a hike of discount rate in his talks.
The results were not far from estimates. The stock market is trending down
on a short-term basis as most technicians can see. After this nasty pullback
we will look to add to shorts. The current target was hit on the downside
Tuesday. We prefer to hold shorts as the odds favor pullback. The next
time point to look for a change will be March 31. All trends are not positive,
except the long-term trend up from 101.20. For now we will watch and observe
the action. The 806 high was a surprise on Thursday when everyone and their
aunts sold and caused the big dump. All the big guns sold. Plaza bought
2000 contracts as stocks rallied up sharply, crushing the shorts by day's
end. We look for equities to remain volatile until the end of March. IBM
fell to 130. and Microgates hit 100.25 before pulling back to 94.25. Bill
Gates made 1 billion this week. Not bad! March 26 was the high as expected.
The levels to watch are 778.00 and 6750 Dow Jones and we saw our 788.50
low this week on Thursday. If these break either way, we will see follow
through to the next support or resistance levels"i.e., 778.20 and
6750.00. This technical picture is clear as the new highs in the Dow and
others and the NASDAQ breached 1280 on the OTC Composite Index. The other
indicators are still negative. Most of the buyers have been crushed this
week as averages dumped horribly. The other indexes were selling off into
lower ranges. Stocks steadied with a 2-point fall on Thursday in the Dow
to 6880.70. This was a 64-point drop on the week in the Dow Jones Industrials.
The long-term trend is still upward. The great ranges in S&P stays
with today's. This is normal for this market. The next target will be
778.20 and we can see if there is any signals occurring here. We look for
some retracement here as the market is pricey. Dow and S&P were up
in the first week of April 52 percent of the years from 1956 thru 1996.
The U.S. stocks have a bit more correction to see. The spring looks to
be tough sledding for bulls. Please protect your portfolio with puts for
the next ten weeks or so. Be out for now as timing indicates a low.
June S&P 500 Index"Position: Close 798.20 up 980.
David E. Triester
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