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Strategies & Market Trends : The Millennium Crash
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To: Claude Cormier who wrote (3927)2/3/1999 7:44:00 AM
From: Arik T.G.   of 5676
 
Claude and all,

I believe my LT EW count is firm
exchange2000.com
and explains the LT economic cycles. It is also supported by the A/D line tops (on 3 of 3 of 3) and bottoms (at cycle bottoms).

The market action in the last few weeks gave me a good hint to the shorter term count, and here it is:

Intermediate 3- 12/94 to present
........... Minor 1- 12/94 to 2/96
........... Minor 2- 2/96 to 7/96
........... Minor 3- 7/96 to 7/98
........... Minor 4- 7/20/98 to 10/8/98
........... Minor 5- 10/8/98 to present
From 10/8 there is a 5 waves pattern which could be called Minor 5 or Minute 1 of Minor 5 (the former is my thinking and the latter corresponds with David Plonk's read):
.................Minute 1 - 10/8/98 to 11/27
.................Minute 2 - 11/27 to 12/14
.................Minute 3 - 12/14 to 1/8 (my birthdate)
.................Minute 4 - 1/8 to 1/13
.................Minute 5 - 1/13 to 2/1
From 1/13 we have an ending diagonal pattern
....................Minuette 1 on the 13th
....................Minuette 2 on the 14th
....................Minuette 3 from 1/14 to 1/20
....................Minuette 4 from 1/20 to 1/22
....................Minuette 5 from 1/22 to 2/1

And yesterday started intermediate 4.

One could argue that the 1/13-1/14 test of the lows belongs to the down move, and therefore 1/14 - 1/20 is minuette 1 and 1/22 - 2/1 is minuette 3, and that calls for another marginally new high before we have a big correction.
Only one way to find out- see what happens first: a marginally new high or a break below SPX 1220.

The only conclusion beyond doubt is that if we break below 1220 we will head much lower. Even if it's only a correction to the last 4 months rally, we should see at least SPX 1150 checked again.

Now for some supportive evidence:

In favor of a big move down (below October lows) that started on 2/1

1. Some Internet stocks (i.e. AMZN) blew a gasket.
2. Blow off in the big techs (NDX stocks and IBM) looks to have ended.
3. The limping characteristics of the recent rally from the January lows (ending diagonal pattern).
4. Many technical patterns and turning points converged yesterday. ask Bobby Beara and others on those.
5. Russel 2000 broke its local support yesterday.

In favor of one more push up:
1. Volume could rise a bit more on up days to complete the distribution (note the unusual high volumes on the NASDAQ on up days since 1/6, an ominous distribution sign).
2. VIX remained high.

What to look for:
================
1. Russell 2000- failing to trade over 425 in the next couple of days will be a strong negative. OTOH trading over 428 will be a very strong positive for the market.

2. NASDAQ and NDX breaking the lower trendline of their respective channels (NAZ 2386 today 2399 tomorrow, NDX around 2000 today, 2012 tomorrow) will leave this index without real support down to the NAZ 2100 (NDX 1700) area. Trading under 2434 (2044) today or 2450 (2058) tomorrow would be a preliminary sign of weakness. Bouncing off those numbers would be a sign of strength.

3. If the NYSE composite trades under 570 it's a sign of BIG trouble ahead. OTOH if it trades over 608 it's a sign of a lot of strength and possibly a bigger rally ahead that would void the count I've suggested and will help the market continue its uptrend a couple more months.

ATG
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