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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 668.73

+1.5%

Nov 24 4:00 PM EST

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To: pater tenebrarum who wrote (17677)	6/17/1999 9:47:00 AM
From: j.o.	Read Replies (2) of 99985

Heinz, I suspect that we saw yesterday a perfect set up for a big downmove. In terms of sentiment swings, I have seen a lot of short-term sentiment roll over in a big way to the bull camp. But when I look at the (admittedly impressive) move yesterday, I can't help noticing that despite the euphoria, we are still below the highs made on the 7th/8th of this month. Now that, combined with the fact that so many are raging-ly bullish at the moment indicates to me that this move is tearing away the short-term bearishness which kept us from moving below 1275/1280 in the S&P. I now expect us to begin our next big downleg. Look at the flash-return of net-euphoria yesterday. That's not bullish, as far as I'm concerned. And AOL and CMGI, while they could move a touch higher, have largely satisfied their requirements for a retracement. The next downmove would be the death knell for those who were in margin-danger last week, and "narrowly escaped"...only to buy more yesterday. As you say...nobody sees a break coming after yesterday's price action, do they? (now I'll probably get my contrarian butt kicked <ggggggggggg>) j.o.

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