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Strategies & Market Trends : MDA - Market Direction Analysis
SPY 672.07-1.7%4:00 PM EST
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To: Slow&steady who wrote (26496)9/21/1999 11:54:00 AM
From: Matthew L. Jones  Read Replies (3) of 99985
 
Upon further examination, I am quite convinced (in spite of the extreme bearishness on the thread) that this is a bump in the road. I am still calling for a correction, but the broad market needs to rally to an overbought position prior to the beginning of the correction.

1) I see the near term support for the DJIA of 10626.6 (intraday low of last Thursday) which we bounced off of earlier today.

2) The futures are hanging around -16 to -18 area having gone as low as -22 just prior to our low.

3) Tick continues to improve, and volume is extremely light considering the news and the day back after a holiday. Nobody is selling.

4) With the slightest catalist the indices move up but the general sentiment is tentative.

5) The media is real negative (analysts all morning long are negative) which is a short term bullish sign.

6) RSI is at 36 (42 on the S&P 500) which is not even close to the overbought area. Real reversals rarely if ever happen from RSI lower than 70. In fact, RSI is bullish.

7) Stochastics are not indicating overbought (32 and 45 for Dow and S&P). Actually bullish to neutral.

I wouldn't be surprised if we don't find a catalist and rally this afternoon.

Well I just got back from the kitchen having a quick lunch and I can see that the market is already beginning to do just that. I don't see much point in going on restating what is now becoming obvious.

Matt
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