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Strategies & Market Trends : MDA - Market Direction Analysis
SPY 671.910.0%Nov 14 4:00 PM EST
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To: Smooth Drive who wrote (29027)10/14/1999 1:40:00 AM
From: Smooth Drive  Read Replies (1) of 99985
 
LG'S OVERALL MARKET COMPOSITE INDEX

The 10 X 30 P&F chart of the OMC reversed down very strongly with today's close:

1760               X   *           X               
1750               X O X *         X O
1740               X O X O *       X O 
1730               X O X O   *   + X O
1720       X       X O X O     *   X O
1710       X O     X O X O   +   * X O
1700       X O     X O X O +       X O < High Pole 
1690       X O X   X O X O X       X O
1680       X O 9 O X O   O X O X   X   +
1670       X O X O X     O X O X O X +  
1660       X O X O       O X O X O X 
1650   X   X O           O X O X A 
1640   X O X *           O   O +
1630   X O X   *             +
1620   X O       *         +
1610   X           *     +
1600   X             * +
1590 O X             + *
1580 O X           +     *
1570 O X         +         *
1560 O X       +             *
1550 O X     +                 *
1540 O X   +  < Revised Bullish  upport Line
1530 O X +    
1520 O +    
1510 +      
1500       
1490       
1480

The index did infact hit the 1760 box on Monday. This chart has hit that box twice before on 7/16/99 and 9/10/99. Three times now it's found considerable horizontal resistance at 1760 and has never broken through this barrier.

Even though this chart was extended (due for a pullback) at the close on Friday, I said it showed strength because of its pattern. Well, the chart that showed strength on Friday is now on a High Pole Formation, which is anything but strength.

A High Pole occurs when a column of X's exceeds the previous column of O's by at lease 3 boxes, and then reverses back and gives up more than 50% of the boxes in the last column of X's. In this case there were 11 boxes in the last column of X's, and 6 boxes would be more than 50%.

80% of the time a High Pole will result in a double bottom sell signal in the current or next column of O's. It would not surprise me to see it pass through the Revised Bullish Support Line support at 1670.

As most folks know, charts (P&F, bar, candle, etc.) are bullish at the top and bearish at the bottom. Even though this chart was showing strength, the New York Stock Exchange Bullish % chart (our primary long term indicator) has been bearish for some time.

Take care,

Eric
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