MDA - Market Direction Analysis Message Board

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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 677.58

-2.0%

Jan 20 4:00 PM EST

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To: dennis michael patterson who wrote (57369)	7/30/2000 9:28:27 AM
From: Les H	Read Replies (2) of 99985

I think he looks at the S&P futures primarily. I've had to start splitting off the database runs into Nasdaq, S&P, and the overall database because of the heavy rotation was making it difficult to get relevant signals from the general database. The Dow and S&P are lagging on the downside. The two most short-term overbought stocks in the S&P that the reports flagged were Boeing (BA) and Bethlehem Steel (BS). I generally follow the buy and sell signals in the database. The difficulty lies in timing the bottom and top since the market can go to extremes on momentum. I'm hopeful the Dow and S&P will pull back more to line up the signals. It appears everyone is looking for a reversal on Monday or Tuesday. The trading channels for the Nasdaq just started turning down at the end of the prior week so I don't think an intermediate-term bottom will be made this week. The 90% band for the Nasdaq is way down at 3420 which is supposed to encompass 90% of the price movement. It's common for the price to move near the lower end and then snap back to the 28-day EMA that anchors the trading bands. I've also been playing around with extending the standard-deviation bands per the Keltner 2 1/2 standard deviations bands: 3 standard deviations using the same anchor is down at 3617 and 4th standard deviations is down at 3496. The price points are moving down about 60 points per day so approximate 3560 and 3435 on Monday. A lot of the trading bands, whether it be the 10 percent bands, 90% trading bands, and the 3rd and 4th standard deviations are lining up at 3550 area and 3430 area. Note also that the trendline from the October 1998 lows through the May lows run to the 3430 level.

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