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What We Said October 16th, 1987

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Princeton Daily Stock Index Report

Newsline for 3PM Friday October 16, 1987

This is the 3PM Princeton Daily Stock Index Report for FRI. 10/16/87 Copyright PEI ALL RIGHTS REVERSED

We will cover our 300 DEC. PUT option selling it out at the market at this time. Thereby taking our profits and standing aside as far as the shorts are concerned. WE will now flip around and buy a DEC. 300 CALL option at the Market. We will hold this position as long as we hold 285 Intra Day. And as long as we hold 28610 on a closing basis. We will cancel our SXCO to sell on a Closing below 303. We will now use a SXCO at 28590. The 303 Weekly Bearish Reversal is important, however because we have moved down to the next reversal at 28610, we see this as being mandatory for election in order to suggest a continued downtrend. The 28610 Weekly Bearish Reversal is actuallly a Double REversal. We have Two Weekly Bearish Reversals both being precisely 28610. Those clients who have been with us for many years know what that means. Executing a double weekly Bearish Reversal is far more important and usually ends up providing immediate follow thru, unlike sometimes the normal weekly bearish reversal. Therefore given the magnitude of this drop and also the fact that the cycles suggest that a 1 week reaction to the upside is possible. We feel that as long as the 28610 level holds, then it is a good possibility that we may be looking at the cycle Low for now. The Monthly Cycles also show that the ideal timeframe should be October, more so than november, however a closing below 28610 this week or any in the future would definitely continue the downtrend further. Monday we will hold this option position as long as we hold 285 intra day. A crack of that level you should immediately liquidate the call option and buy a DEC 280 Put Option, therefore in conclusion we see that todayu may be the cycle Low at least temporarily, as long as we hold the 28610 we will be buying a Call Option and taking the Long Side. A Close below 28610 and we will be moving back to a Short Position. We will update MONDAY AT 10AM.