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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 691.88

-0.3%

Jan 30 4:00 PM EST

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To: Les H who wrote (71920)	3/12/2001 8:18:03 PM
From: Les H	Read Replies (1) of 99985

Three Gap Play WHAT TO EXPECT NOW. March 12, 2001 Ord Oracle. There may be a "Three Gap Play" forming on the June S&P's. This bullish pattern forms when near three consecutive gaps appear. So far, only two gaps have appeared and the potential third gap may be in front of us. If a third gap appears tomorrow that is larger than the previous two than that would complete the "Three Gap Play" and should market a short term low. The "Weighted Put Call Ratio on the OEX" closed today at .22. This ratio says that about 400% more money is going into puts than calls. We use this as a contrary indicator and is bullish sign. Over a 1000 downtick reading was recorded today and is another bullish sign. If a third "Big Gap Down" forms on tomorrows open, that condition may market a short term low. The NDX also has a potential to form a "Three Gap Play". If a third " and bigger than the previous two" Gap forms tomorrow, than that would also imply the NDX is also near a short low. In "Wyckoff" method of technical analysis, the final low should come with extreme volume. Highest seen thus far. The last highest volume day came on January 3, 2001 (3.16 Billion shares). The final low will exceed this number and could approach or exceed 4 billion. If 4 billions shares come in tomorrow, than we would have to say the bottom is in. If the volume does not approach 4 billion, than the potential low could only be a bounce in a downtrend and new lows later will appear. If a third big gap appears tomorrow, we may cover our short on the NDX. We are bullish on gold. Wave "1" up was the October 1999 rally. Wave "2" down may have ended at the February 16 low. Wave "3" up has begun. We are long the Xau. marketweb.com

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