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 September 8, 2004 Commentary (mid-week
edition)-
Today I'm going to briefly discuss something
interesting that has come up in the many e-mail responses I have gotten to the
last few commentaries. I will then show an interesting divergence that many of
you may already be quite aware of. And lastly, I'll finish with some follow up
on the potential plays I have been discussing.
I have received quite a few e-mails
regarding my decision to 'give in' to the many requests for a 'package deal' on
the entire book set. Of the e-mails that I received, most were from people who
have already bought the entire set. Not one of these people inquired about a
possible discount when they bought. All bought at full price, without
hesitation. Of those that e-mailed me, the overwhelming response was that they
disagreed with my decision to offer the package.
Most felt, if anything, that the
price should have been raised. A few felt it should have been substantially
raised. One person said: "I don't care if the new book is $500, I'm buying it."
All felt that the price was so nominal for such information, to quibble over
such a small amount doesn't bode well for the future business prospects of
those that think getting a reduction in one of the key aspects of the business
(quality education) is so important.
That has been my feeling all along, but I got
tired of answering e-mails, so I went against my better judgment and did it
anyways. I'm glad to see how the previous purchasers felt on this topic, and I
appreciate the input. And in case it seems like these people were saying this
after they had already bought, keep in mind that they were telling me this,
even though it may have had an effect on the price they would be paying for the
new book.
Let's look at an interesting divergence that has been going on for
quite a while now. I suspect most of my readers have been following this, but
in case that's not the case, I'm going to show this here. And, is this going to
be a nice indicator divergence? Is it a positive or negative divergence? You
all know me better than that. Other than the very occasional use of indicators
(I do use them sparingly, for certain purposes), I trade price action, and I
look for divergences in the price action.
Here's a chart of the daily S&P
cash.
I don't need to be any more exacting than
this. Take a look at the arrow. Which way is the trend? Now let's look at the
SOX index.
Again, take a look at the arrow. Which way is
it trending? While all the talking heads are very bullish, and the S&P is
still going up, look at what is happening in the semiconductors. The NASDAQ is
trending up right now, and the SOX is getting pile-driven into the turf for new
lows for the year. This can't go on for too much longer, in my opinion. I'm
keeping a close eye on this situation for possible opportunities.
Let's move on
to the plays that I have been watching. ZRAN, given that it is a semiconductor
stock, has continued to roll down off that initial ABCD pattern, and is not
headed towards the PTA at all. Although the area isn't totally invalidated as a
potential trade area, and I'm going to keep it on my chart, that setup is now
off my watch list. That's the way it is many times, especially if I start
watching early.
Now let's look at GOOG.
GOOG came right down to the upper grouping
and reversed nicely. It gave a pretty good entry trigger on the lower
timeframe, and then came back down to try and shake the tree a bit. The price
action never reached anywhere near a technically placed stop, say, just under
the top grouping, for example. GOOG has since been chopping its way higher. So
far, I'm pretty happy with my position with this one. Barring a big gap down,
this one is close to a 'scratch at the worst' play, which is exactly where I
like to be.
Let's finish with gold.
Gold is not doing what I'd like to see it do,
but so far the setup is still valid, and the time factor I mentioned sure seems
to be playing into this. Gold has done an ABCD down, but it is extended, and it
traded into the area of the 'wave 1' swing-high. Both of these are scenarios I
would have preferred didn't happen. The lower median line parallel has also
been penetrated.
For me, this all adds up to this current area right in here as
being very important. If it is going to be a decent looking setup, gold needs
to start moving up from here. It has its launch pad right here, and this is
where it has to happen. Everything is set up from here, including the time
factor. Now I just wait and see if it plays out.
I want to thank everyone who has
ordered the new book, and
everyone who sent me e-mail feedback. It's really appreciated. Everything
appears to be on schedule with the printers, so I should be able to start
shipping the new books at the end of this week, as hoped.
The next
commentary will be the weekend edition, posted by Sunday.
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