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Strategies & Market Trends : MDA - Market Direction Analysis
SPY 659.03+1.0%Nov 21 4:00 PM EST
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To: dennis michael patterson who wrote (21158)7/26/1999 11:18:00 PM
From: Smooth Drive  Read Replies (2) of 99985
 
Hello All,

The sky is falling -- the sky is falling<g>.

Or at least LG's Overall Market Composite Index (OMC) is. Since the OMC P&F chart gave a High Pole Formation last week (which 80% of the time leads to a double bottom sell signal) this chart has been all down hill.

1760                                               + X *
1750                                             +   X O *
1740                                           +     X O
1730                                         +       X O
1720                                       +     X   X O < High Pole
1710                                     +       X O X O
1700                                   +         X O X O
1690                                 +           X O   O
1680                               +           + 7 *   O < DB Sell
1670             X               +           +   X   * O
1660             X O           +           +     X     O
1650             X O         +           +       X     O *
1640             X O       + X         +     X   X     O
1630     X       X O     +   X O     +       X O X   + O
1620     X O     X O   +     X O   +         X O X +   +
1610     X O     X O +       X O +           X O X   +
1600 X   X O     X O 5       X O X           X O X +
1590 X O X O     X O X O X   X O X O         X O +
1580 X O X O     X O X O X O X O X O     X + X *
1570 4 O   O X   X O X O X O X O   O     X O X   *
1560 X     O X O X O   O X O X     O   + X O X     *
1550 X     O X O X *   O X O       O +   X O X       *
1540 X     O   O X   * O           O X   X O X         *
1530 X         O X     *           O X O X O X
1520 X         O X       *         O X O X O X
1510 X         O X         *       O X 6 X O
1500 X         O X           *     O X O X
1490 X         O X             *   O X O
1480 X         O                 * O
1470 X                             *
1460 X                               *
1450                                   *

So far it's passed right through horizontal support from the previous bottom at 1690; a Bullish Resistance Line at 1720, 1670 and 1640; a Bearish Support Line at 1660; and it't now one box above a short term uptrend line sitting at 1620.

You might recall that I posted Worden's tip last week as follows: "Did you know that within an uptrend previous tops are more valid support levels than previous bottoms? When the price approaches a previous bottom, it will probably go through." This is also occasionally true in a P&F chart. Count back to the left and look at the third column of O's. Notice that it found support near the previous column of X's top in the 1580 - 1590 area. Will the current column of O's find support here, or continue to drop? This is an overall market index. What's the thread think?

The current incomplete bearish price objective is 1500. The 50 DMA is 1616.70, the 150 DMA is 1541.30 and the 200 DMA is 1454.01 with today's close at 1627.55

Take care,

Eric
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