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Strategies & Market Trends : John Pitera's Market Laboratory

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To: John Pitera who wrote (1853)	5/31/2000 5:16:00 AM
From: robert b furman	Read Replies (2) of 33421

Hi John, O'neil states:At some point on the way down,the indices will attempt to rebound or rally.A rally is an attempt by a stock or the general market tot turn up and advance in price after a period of decline. Bear markets normally come in two or three waves,interrupted by several attempted "false rallies" that usually fizzle out after one to three weeks and occasionally five to six weeks or more. Eventually one of the rallies will "follow through". A "follow through" occurs when one of the indices closes up 1 % or more with a jump in volume from the day before.This confirmation will usually happen on the fourth to tenth day of the attempted rally. To summarize: tuesday was the fourth day from wednesday's turnaround rally.Tuesdays 1.4 million shares traded was marginally more than fridays weak preholiday volume.The fit ,by definition(utilizing mondays time gap as a trade day) fits. O'neils volume premise is used to gage the return of institutional buying. I don't think the fourth trading day is tuesday I think it is today wednesday.The volume on tuesday doesn't show clearly the institutions are back - I think GZ nailed it perfectly on friday ,monday was a short covering day rather than institutional buying day. That's not to say today won't be the follow through day - in fact I'm looking for it to do that.I'm hoping more for a 2 million volume day. JMHO Bob P.S. He also uses an increasing advance decline line as a value in determining if a market has bottomed." During attempted rallies in a bear market.The advance/decline line can sometimes be of value,when it shows no ability to rebound when the indices try to rebound . GZ is the local 25 day moving average adv/dec guru. I've got to get going.Auction in Shreveport today and it's a pretty drive thru east Teaxas.Great trading to all today. My IBD just hit the driveway. O'Neil calls it a follow through but hedges. "Still follow through can fail and Tuesday volume left plenty of room for doubt".He says what needs to be next is leadership and breakouts from leading stocks and highlights: INTC and SDL. I'm glad at least I know what to pay for a Chevy Truck< VBG>

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