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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 691.97

-0.3%

Jan 30 4:00 PM EST

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To: Les H who wrote (64156)	12/12/2000 12:01:03 AM
From: Les H	Read Replies (2) of 99985

WHAT TO EXPECT NOW. December 11, 2000. Ord Oracle. marketweb.com The March S&P gapped up over 30 points on today's open. These huge gaps are usually filled quickly. To fill the gap on the March S&P's a pull back to the 1350 area would be required. Twice last week the uptick reading approached or exceeded 900. Uptick tick readings exceeding 600 appear near short-term highs. No bearish candlestick pattern has formed yet to signal a short term high. The "Bridge Market Barometer" came in last week at 77% bulls on the December 7 reading. Readings above 75% bulls appear near short-term highs. There is a trend line connecting the highs going back to the September 1 high that comes in near the 1415 area on the March S&P's and should provide resistance. Today's high was 1412.50. Also, on November 30 the S&P broken below the previous low of October 18 low on increased volume. This condition implies the November 30 low will be tested again. Therefore, there is evidence that the S&P's are still in a trading range. We will be looking for a trigger for a put position on the market for a short-term trade to at least the 1350 area if not all the way down to a test of the November 30 low. Since this will be a short term trade, will not attempt to short the S&P's but buy the puts instead. The Nasdaq 100 produced three gaps up. The first gap formed between December 4 to the 5. The second gap formed between December 7 to the 8 and the third gap formed between December 8 to today's open. According to Candlestick rules, after three gaps the market is extended and is expected to reverse and pull back to the first gap. In this particular case the first gap formed near the 2550 area. On November 30, the Nasdaq 100 broke below the previous low of October 18 on increased volume. This condition implies the November 30 low will be tested again (2426 level). Therefore, a basing process may have started with the Nasdaq 100, but it appears a least one more time down may be in order to complete the basing. There may be a QQQ put option trade lining up for the short term. No signal for that trade yet. We are bullish on gold. Wave "1" up was the October 1999 rally. Wave "2" down ended at the November 2000 lows. We think wave "3" has started. We are holding our long position in the XAU.

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