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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 683.21

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Jan 2 4:00 PM EST

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To: HairBall who started this subject	12/13/2000 11:05:12 AM
From: eichler	Read Replies (1) of 99985

Hmmmm Walking down the street of the deserted Ghost Town MDD... seems the entire population just up and disappeared...... Oh well. Thought I'd make an observation on the $compx regarding market direction anyway. If I had my head stuck in the sand, without a clue as to the election conclusion or any other news for that matter; just looking at the daily chart for $compx....it would appear to me that we hit a bottom of some sort on 11/30...rallied up to a peak on the full moon day 12/11 and just hit a wall. Looking at the action of Mon-today, eyeing the indicators (sto, adx, 5e8sMA), I would have to believe the compx has topped and is turning back down. I am aware this is in direct conflict with the mass expectations for a sustained rally off of the 11/30 "bottom". It's just not looking like much of a continuing rally right now. Perhaps the news is "priced in" already. Perhaps there is more "tax-loss selling" to occur. Perhaps valuations are still too high. Perhaps the downtrend is still in force and new lows are right around the corner. Perhaps the gaps below need to be filled. Many questions, few answers. Whatever the dynamics, reasons, explanations.....all I can perceive right now is that the daily chart looks terrible in terms of a sustained move up from here. It looks far more likely there is more downside ahead. Many stocks have already run up considerably from their bottoms (lbrt up 100% from 10 to 20 in 7 trading days). Were they that oversold? Do we now have trading ranges that span 100% valuations in a week? Does the overhead election conclusion answer questions of indecision or does it now bring many more questions to the table? Like how does the rest of the world view our joke of a democracy? Will skeptical foreign money flee U.S. Markets? In conclusion, I don't know the answers. But I feel quite strongly right now that this market is not right. If compx does indeed turn down now over the next few days, will it be able to reverse and climb up again? If we retest the bottom, will it be able to hold or do we get a new lower low. Everything is as perfectly UNCLEAR as ever! Be careful out there! Good luck to all. Regards, Eichler

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