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Strategies & Market Trends : Stock Attack -- A Complete Analysis

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To: donald sew who wrote (26624)	8/2/2000 5:30:48 PM
From: donald sew	Read Replies (2) of 42787

AUG 2 INDEX UPDATE --------------------- SHORT-TERM TECHNICAL READINGS: DOW - just entered overbought region SPX - midrange OEX - lower midrange/midrange NAZ - oversold NDX - oversold VIX - 22.70, lower midrange 5 DAY TRIN - 4.65 With the SPX up only .60, I consider today as being flat even though the DOW was up nicely. Please keep in mind that I am using an averaging perspective of the DOW/SPX/NAZ. The reason I now prefer to use an averaging view of those 3 indices is that due to SECTOR ROTATION , viewing just the DOW or just the NAZ may give a skewed impression as to how the overall market is doing. So for now I prefer to concentrate on the SPX which normally straddles the middle between the DOW and NAZ, even during extreme SECTOR ROTATION. The 5 DAY TRIN has been dropping and is now on the bearish side of neutral. One strong up day the the 5-DAY TRIN could get to/close to 4.00 which is commonly a short-term sell signal. The divergence between the DOW and the NAZ, just is not a good sign for the NAZ. The NAZ/NDX appears to be forming a RECTANGLE, which would be bearish since RECTANGLEs normally break in the direction of the current trend. The UPPER TRENDLINE of this possible RECTANGLE is around 3600-3625, and the LOWER TRENDLINE around 3450-3500. I suspect that we could get a 1 day sligh breakout of the rectangle, which would be the day to short. One such occurance of this pattern with a 1 day breakout occurred in the selloff of 1998. So I will be waiting for a break above 3600 to possibly short the HiTECHs. A week or so ago, I mentioned that the US DOLLAR was forming a BEARISH FLAG and that it was approaching the LOWER TRENDLINE of that FLAG which was around 107.5 at that time. The US DOLLAR is now testing the UPPER TRENDLINE of that BEARISH FLAG and I also have a CLASS 2 SELL SIGNAL on the DOLLAR. The environment is lining up for selling to resume in about 1-3 days.

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