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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 683.47

+0.6%

Nov 28 4:00 PM EST

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To: GROUND ZERO™ who wrote (31645)	10/28/1999 10:06:00 AM
From: HairBall	Read Replies (3) of 99985

GZ: The actual overall market peaked April 98 per the VGY and A/D line. The overall market as measured by the Indexes peaked per my OMC in July of this year. We continue to see a staggered move down. (I have mentioned this expectation in earlier post on this thread.) The first stagger relationship I see is between bond rates and the equity indexes. The second stagger relationship I see is between the two primary "weighted" indexes, the NYA and the COMPX. Looking at formations of the two on the daily semi-log charts, the NYA is in a falling wedge while the COMPX is in a rising wedge. This will provide divergence on the way down for the indexes. The NYA will begin to lead in the up moves as it retraces some of its move down. The NYA has led in the move down to date. The COMPX will begin to lead in the down moves. This will help keep the bullish case alive as the equity indexes and eventually rates make staggered moves to lower levels. I suspect, if we see a strong momentum move down in the equity indexes, it will come at lower levels. Then I would expect the years of BTD mentality to kick in, creating a strong corrective rally in the equity indexes. Before this market can begin a sustained rally again, I believe the "glamour" issues will have to be rung out. I expect my OMC Index to move well back into its multi-decade rising trading channel. This has not happened yet, but it will. EDIT: I typed this before the market opened this am, but am just now able to post it. The NYA has breached the upper descending trend line of its falling wedge. The stagger continues...I will try to post some charts which support the above expectations later today! I must admit, I am a bit surprised the OEX/SPX is leading the rise on a percentage basis. Good trading... Regards, LG Disclaimer: The above is my opinion only and I reserve the right to be wrong. An overall market expectation is just that and should not be used in exclusion of the evaluation of individual equities or other investment instruments. Do not base any investment decision solely on anyone person's views or analysis. Do your own research and take responsibility for your investment decisions.

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