MARKET INDEX TECHNICAL ANALYSIS - MITA Message Board

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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA

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To: J.T. who wrote (5931)	1/8/2001 2:16:52 AM
From: J.T.	Read Replies (3) of 19219

Rydex Total Assets Update for Friday, January 5th 2001: Regular Series: SPX Long - NOVA 376.0 Million SPX Short- URSA 251.5 Million NDX Long - OTC 1,760` BILLION NDX Short- Arktos 88.8 Million XAU Precious Metals 27.2 Million Banking 154.0 Million Biotechnology 472 Million Money Market 1,070 BILLION ******************************************* Dynamic Series (200% correlation) SPX Long - TITAN 72.3 Million SPX Short- TEMPEST 21.9 Million NDX Long - VELOCITY 116.4 Million NDX Short- VENTURE 30.4 Million ******************************************* Now after the last three trading days I think we all got a little taste of this manic depressive market and feel the pain and state of mind the king...Elvis... must have went thru... Key in on Rydex Banking... Total Assets decreased a paltry 4 million after BKX got pummeled 43 points down 3.5% off the tailspin of BAC woes and potential loan problems with PGE and california utilities and subsequent downgrade in debt intruments by moody's... BKX after breaking out to new all time back to back highs (BKX 944; BKX 956) Friday's reversal blew right thru these levels to close at BKX 923- right smack on the 5 day moving average. We are going to see if this is a one day false break back down or not come Monday. And the way the money is positioned still heavily long, I would not be surpised to see a lower close in BKX at mondays closing bell. It is important for BKX to stay above BKX 898-902 level at the close for the Bullish argument to maintain any credibility going forward. BKX 902 is the 13 day MA and BKX 898 is the support level established prior to the one day false closing break on January 2nd (BKX 888.6)and subsequent waving of the magic wand interest rate cut by A.G the next day for the BKX 944 close on Jan 3rd. The Two Day false break??? If there is one thing I have learned that sometimes the trap set is a double trap - A two day false break. That is, even though the second close justifies the first close closing higher and negating a 1 day false read. There have been rare instances that you have a 2 day false upside break and then crash and burn back down. Two striking examples of this 2 day false upside breakout readings was when NDX closed back above NDX 4,000 in back to back trading days on July 14th and 17th (NDX 4041; NDX 4,062)after trading below this 4,000 level since early April only to turn back down and repeat the same trap on August 31st and September 1st when crossed NDX 4,000 again ( NDX 4,077; NDX 4,099) only to turn back down and never see it close above NDX 4,000 again. This is why the read on BKX tomorrow is so crucial. And I am believing this XAU two day false downside break below 50 is potentially just the oppositie of BKX's two day upside false break. XAU closed at XAU 49.79; XAU 49.23) after trading above XAU 50 for 10 straight trading days. XAU should bounce back smartly above 50 tomorrow and Rydex Precious Metals low TA strongly imply this will happen. Time to get back to the winning ways after getting beaten like a borrowed mule the last 3 days. 50% XAU Precious Metals; 25% SPX Long NOVA and 25% Long OTC Best Regards, J.T.

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