INSIIDE Track Hotline

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10/5/99 INSIIDE Track Hotline - The Stock Index analysis for a rebound remains intact and traders should have liquidated ½ their short positions around 1290.00/SPZ and the other ½ when trailing stops were triggered at 1303.30/SPZ, allowing for average gains of between $16,000 and $25,000/contract on the overall position. This rebound is capable of extending into October 11/12th so traders should abort the strategy given in the October INSIIDE Track and replace it with the following. Re-sell SPZ futures and/or buy November 1280 put options at 1354 to 1360/SPZ and risk a daily close above 1369.60/SPZ. If the DJIA reaches 10,850 without the SPZ reaching 1354.00, initiate shorts and risk a daily close above 1364.50/SPZ. There is also one contingent strategy in case I am wrong and today is the high of this rebound. If the SPZ closes below 1293.50, sell futures and risk a daily close above 1308.00/SPZ.

Bonds are in alignment for the ideal scenario for a low. They have declined into the cyclically significant week of October 4-8th and they are within striking distance of the downside objective of 111-24—111-30/USZ. Since they have already hit the monthly raw SPS, the strategy described in the October INSIIDE Track remains my primary one and traders should be buying Dec. Bond 118 calls at these levels. In addition, futures traders can buy a daily close above 112-19 and risk a close below the low of this decline. If a daily 2 Close Reversal higher occurs before a close above 112-19/USZ, buy futures and risk a close below the low of this decline.

Dollar shorts remain intact and traders should now lower buy stops to a daily close above 98.10 OCO a daily 2 Close Reversal higher. Take ½ profits at 96.95/DXZ.

9/22/99 INSIIDE Track Hotline - Stock Index analysis remains the same as in yesterday’s interim hotline and traders should be short from 1364.00—1369.00 and again at 1378.00/SPZ and/or long October 1300—1320 put options from the same level and now risking a daily close above 1337.00/SPZ and look for a close below 1287.00/SPZ as the next level of immediate confirmation. If/when the S+P closes below 1287.00/SPZ, lower stops to a daily close above 1306.00/SPZ. Friday’s close should reveal a great deal more and I will update short-term analysis in the Weekly Re-Lay. Intermediate analysis will be updated in the October INSIIDE Track.

As long as Bonds do not close above 114-08/USZ, there is still the chance for a final low into early-October. If this is to be the case, the ideal scenario would see a slight new daily high tomorrow and a close below 113-17/USZ, creating a daily 2 Close Reversal lower. In addition, a Friday close below 113-31/USZ will create a weekly 2 Close Reversal and project a final 1-3 week sell off. No new trades.

Gold & Silver have confirmed minor lows and are poised to rally into October 4-8th rather than decline, as discussed in the Sept. 11th hotline. However, Silver must give added confirmation to convince me of this. Dec. Silver closed below 515.0, stopping out long futures with small losses. It has since rallied to test its weekly LHR. If the 9/24 close is below 529.0/SIZ, this will indicate that Silver could still have a final decline to test the 480-488 level. If it closes above 529.0, it will convince me a low is intact. Risk a daily close above 533.0 on put options.

The Dollar continues on track for another low into early October and traders should be short with open gains and now risking a daily close above 100.19/DXZ. The Yen has climbed higher and has the potential to reach 102.00 before year-end, possibly within the next 30 days. The Euro is expected to set a lower high between Sept. 30th and October 5th and then begin another decline. No new trades.

Soybean traders remain long from 431-435 and should be holding with open gains of about $2500/contract while long trades in Corn & Wheat should also be held with stops described in INSIIDE Track. Move sell stops in Soybeans to a daily close below 481.5/SX.

Crude Oil continues to move higher with a 25.92—26.07 as the next upside objective. However, Nov. Crude needs a close above 24.18 in the next two days to confirm this. If it gives a 2 Close Reversal lower before accomplishing this task, a 5-7 day correction is likely to take hold. No new trades.

9/23/99 INSIIDE Track Hotline - Stock Index analysis remains the same as in yesterday’s hotline and traders should be short from 1364.00—1369.00 and again at 1378.00/SPZ and/or long October 1300—1320 put options from the same level and now risking a daily close above 1321.90/SPZ. The DJIA has confirmed a top and traders should be looking for a daily close below 1287.00/SPZ and ideally below 1272.00/SPZ as the next level of intermediate confirmation. If/when the S+P closes below 1287.00/SPZ, lower stops to a daily close above 1306.00/SPZ. If the market continues to accelerate lower into September 29/30th, there is a chance that a minor low could take hold and the market could bounce in the first half of October.

However, the important point is to stay short until a low is signaled or trailing stops are triggered. Friday’s close should reveal a great deal more and I will update short-term analysis in the Weekly Re-Lay. Intermediate analysis will be updated in the October INSIIDE Track.

Bonds closed above 114-08/USZ and are likely to test 115-06 – 23/USZ near-term. If a high is seen at this resistance in the next two trading days, a final decline into early-mid-October is still possible, but it will take several technical events to confirm it. No new trades.

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