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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 689.10

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Jan 23 4:00 PM EST

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To: Paul Shread who wrote (46385)	4/14/2000 11:05:00 PM
From: lawdog	Read Replies (1) of 99985

On 10/8/98, the low of that correction, equity p/c hit 1.27 and index p/c was 1.67. VIX ranged from 48 to 61 with its close at 48. Neither p/c is that far from the ratios we saw today. This corresponded with a 30% decline in the Naz. But the decline was drawn out over a 3 month period from July to October. A good day for comparison purposes is 8/31/98. p/c equity losed at .95, VIX at 48 on a decline of 8.5% in the Nasdaq. This one day drop was in the midst of a 17% decline occuring over 4 trading days in a row. Next two trading days saw a 6% bounce, mostly coming in the trading day immediatly following the decline. This is why I believe odds are favorable for a short term upward retrace of the last weeks losses, followed by a downward trend to new lows. Data isn't available for 1994.

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