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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 679.68

+0.7%

Nov 26 4:00 PM EST

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To: dennis michael patterson who wrote (32186)	11/3/1999 9:06:00 PM
From: Gary Burton	Read Replies (2) of 99985

fwiw--The yield on the long bond has today completed 5 waves down from 6.40 down to 6.11. That suggests an imminent backup in yield to partially retrace the 29bp drop. There are 2 gaps in the drop, one at 6.24 (a 47% retrace) and 6.32 (a 72% retrace). The inference is that bonds are about to fall significantly in price starting probably tomorrow. This may signal that the stock rally may abort (IF we take out 10,521, it would be a bearish sign and imply a greater risk of new lows-much to Wall St's total surprise) --the other thing that is very disturbing -to me at least-is that many of the megacaps have already reached or even slightly exceeded their Long Term (several years)upper trendlines drawn on log scale, suggesting very little room to continue moving up in the short run. Add in the MSFT ruling likely coming after the close on Fri and we have the POTENTIAL ideal setup for a sharp decline in the averages.

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