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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 675.02

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Nov 25 4:00 PM EST

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To: Les H who wrote (73372)	3/27/2001 4:00:59 PM
From: Les H	Read Replies (1) of 99985

Automatic Rally WHAT TO EXPECT NOW. March 26, 2001. Ord Oracle The S&P appear to have had a "Selling Climax" on Thursday. A "Selling Climax" is a very high volume day that draws a bullish "Candlestick Pattern". The volume reached 1.73 billion shares, (which is the highest volume day this year on the NYSE) and the candlestick pattern formed a bullish "Hammer" on Thursday. "Selling Climax" appears right at or near bottoms. After the "Selling Climax", an "Automatic Rally" occurs. An "Automatic Rally" is a bounce on light volume that can last a few days. After the "Automatic Rally" is complete, a "Re-test" comes next. A "Re-test" is a pull back that can retrace anywhere 50% to 100% of the "Automatic Rally". The S&P is endingthe "Automatic Rally" phase now. We noticed that the Volume dropped off significantly from Friday while the S&P rallied further today. To have a sustainable rally the volume needs to go with the rally. Also, a bearish candlestick pattern called a "Doji" formed today that coincided with a 703 uptick reading, which triggered a short term sell signal. We will look for the "Re-test" phase to start possibly tomorrow. We plan to go long the S&P on the next pull back, anywhere from 1120 down to 1080 area. The NDX may be drawing a bullish candlestick pattern called a "Fry Pan Bottom". The "Fry Pan Bottom" forms a saucer type bottom pattern. For confirmation of completing the bottom, the market will gap away from it. We have not seen the gap yet, but if the NDX trades near current levels, we will conclude the "Fry Pan Bottom" is in the making. We are long the QQQ at 42.80 with a stop at 39 for now. The first upside resistance is near the 2100 area on the NDX which equates to 50 area on the QQQ. 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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