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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 671.91

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Nov 14 4:00 PM EST

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To: Boplicity who wrote (46638)	4/16/2000 1:48:00 PM
From: Return to Sender	Read Replies (1) of 99985

Greg, we will get a rally. The question is when and from what level? I personally believe that there is quite a bit more selling on the immediate horizon. Take a look at this chart of the Nasdaq Composite. Run a line from support levels seen back last October and you will see that even after this much selling that many pure chartists believe that there is much more room for pain on the downside. A real support level might be found around 2,632. That was the low registered on October 18, 1999. bigcharts.com I think the selling will end fairly soon but we will get a lot of pain before that happens. Another Black Monday? It might not end that way but it sure could start out like it. I'm afraid that a second Black Monday is entirely possible despite all the recent selling. Yes there is plenty of money on the sidelines but it just might stay there until we reach a point of total capitulation. Real support apparently lies hundreds of points lower than where the Nasdaq closed on Friday. Anything positive that we can take out of this situation? There are always positives including the tremendous amount of pessimism. Technical analysis is not an exact science in my opinion, rather just a tool to help eliminate emotion. Here is a big positive. We have an incredibly oversold condition on the Nasdaq. The entire Nasdaq is close to only 20 on a relative strength basis. The lower Bollinger Band has been violated again telling me that we should get a snap back rally soon. Those investors who can withstand the pain of margin calls and inflationary fears will have a chance to add revaluate their portfolios and invest in quality companies at much more reasonable prices than just a few weeks ago. RTS

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