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Strategies & Market Trends : MDA - Market Direction Analysis

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Nov 21 4:00 PM EST

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To: Teresa Lo who wrote (29302)	10/15/1999 4:05:00 AM
From: Teresa Lo	Read Replies (2) of 99985

THE TRADER'S NOTES for Friday, October 15, 1999 Yesterday's Observations: Treasury bonds broke down some more. Markets were weak but tried to hold. FOMC Chairman Greenspan gave a bog.frb.fed.us speech that unnerved traders. Market internals deteriorating fast as new NYSE 52-week lows expand to 357 vs. 24 new highs, and the 10-day MA of Net Differential of NYSE New Highs/New Lows turns over, confirming weakness across the board. Today's Theme: Producer Price Index, Industrial Production and Capacity Utilization numbers all due out this morning. This is the moment of truth. Will the market finally "kick it" right here or will it make yet another dramatic pullback from the edge of the cliff? The Trader's Notes prepares the trader for the day ahead, providing information on market sentiment, internals, support/resistance levels and key pivot points in the major market indices. Use of moving averages and the Average Directional Index (ADX) indicator helps to determine whether the market is trending up/down or chopping sideways. Using Japanese candlestick charting techniques, observation of market action around support and resistance assists in the analysis of supply and demand based on fundamental principles of classical technical analysis. The results set up "if-then" scenarios used by the trader during market hours. Technical analysis is not used as a tool to "predict" the future or to pick tops and bottoms. It is used to detect areas of trend change and emerging trends. In a trading range, traders generally look to buy at the low end of the range and to sell at the high end of the range ? or stay out all together. In a trending market, traders generally look to enter the market on every retracement until it enters a trading range and ends on a test. The goal is to buy every dip in an uptrend and sell every rally in a downtrend. The trend is your friend until the end when it bends! Charts specific to these comments have been posted to intelligentspeculator.com

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