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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 665.67

-0.9%

Nov 17 4:00 PM EST

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To: donald sew who wrote (25651)	9/14/1999 1:58:00 AM
From: Lee Lichterman III	Read Replies (1) of 99985

I too was alarmed at how fast the new lows jumped up but I am still getting too many mixed signals to say either way for the short term. On teh thought of rate of change, I also noticed strong drops in many of the stocks I track and noted today the OEX dropped a lot easier than it climbed for most of the day. I have buy signals on some sector indexes and sell signals in others. The main indexes are just floating in La La land with no real clues for direction so I figure the entire world is waiting on this CPI report and the Fed. Another alarming thing I have noticed was how the advancers eaked out gains while many of the decliners were down hard. As for the NASDAQ, I see no real alarms there yet as today's drop was a repelling of the NDX off the same trendline that has held back the last 3 or 4 major tops. This is one thing that has me slanting bearish on the tech stocks as I see there is a need for sector rotation out of them and into some of the other sectors. Gaming and Forest paper have been trying to do some of the work the last few days but I think some others need to take over soon. I think this market is very sick right now with Trannies, telecom and banks down, the insurance sector was already having a hard time and this super hurricane is not going to help them at all. I just wish they were higher so I could short them before this Floyd hits. Oil hitting 24 a barrel and food prices moving up can not be good and if it doesn't show up on this report, it will on the next one. ALmost everything we use now days is made from or has plastic in it and it takes oil to make plastic. I think it all hinges on the CPI. My weekly charts are targeting 2-3 weeks out as a time to be short at the present rate of climb. We should hit strong resistance in every major index in that time frame and there will be a choice of either having Heinz's blow off top or else dropping to at least the middle tines and then having another assault for X-mas to the top. I have to admit, I haven't done much analysis tonight as I believe the CPI dictates our future and the OEX being in the Max Pain area already limits potential for plays with it. I do have a short term sell signal on Japan so I am going to watch and see how it does 2 day from now. Not sure if them dropping will be good or bad for us since weakness there may ease some tension on the dollar. They rallied the futures on the close again so it only takes a positive GLOBEX reading of .01 by my calculations to trigger a buy program. We need over 4 1/2 negative to trigger a sell. Just another of many small things that says they are still biased upwards despite the poor health of the market. I read an article tonight that one of Fidelity's funds has the largest allocation to cash it has had in years yet they aren't warning J6P. Also the Advance decline is lower than in Oct 97 I read but have not verified. This market has cancer in every organ, has AIDS, is missing a lung and has severe late stage heart disease but it is going ot try it's best to run a couple more marathons to keep up appearances. We may not get any warning before it drops dead in the street right in front of the TV camera and spectators. <ng> My point is I see what you are seeing but it just seems to be shaking off all danger signs. I think it could take another couple weeks to finally give in. remember, on this thread we are always way ahead. <g> Good Luck, Lee

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