MDA - Market Direction Analysis Message Board

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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 679.70

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To: Gary Wisdom who wrote (23220)	8/17/1999 7:59:00 PM
From: pater tenebrarum	Read Replies (2) of 99985

Gary, another way of looking at the specialist and members net long position is that they now have a lot of inventory which probably is in the process of being distributed during the current rally. these guys can be as wrong as anyone....note that they shorted the first and biggest leg of the rally from the october low only to go long as the first small correction was approaching. after all the specialists are supposed to ensure an 'orderly market', meaning they have to buy if there are sell side imbalances and vice versa. i'm sure that helps to distort the picture somewhat and the chart reveals that they catch important turning points sometimes and sometimes they don't. in fact the chart is extremely erratic and i have doubts about it's predictive value. i do believe however that the next dip should be bought, based on current evidence. btw, the biggest buyers of index puts in the latest correction were clearly institutions - and the put/call ratios reached extremes that suggested either an intermediate term bottom was near or a crash. since a crash is a highly improbable event we got a bottom. btw, do you know perhaps of a site that provides a less cramped chart of the specialist and member positions? the one on market gauge is straining the eyes... regards, hb

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