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Strategies & Market Trends : MDA - Market Direction Analysis

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To: Keith Feral who wrote (76619)	5/7/2001 5:35:03 PM
From: eichler	Read Replies (3) of 99985

Keith, Good food for thought. My own observations in the past regarding impending news and trading before and after the event itself supports the idea of a sell off after the announcement, though I only use this type of thinking for short term trades. If a sell-off occurred, I think it is likely a bottom re-test and gap-filling expedition ensues. My own expectation is that a higher low would result. As Temple Williams has pointed out elsewhere, the new bull(debatable) should be OK provided the low holds. On the prior rate cuts, the market was headed lower prior to the events (sell the rumor) and rallied sharply (buy the fact) after the events. The prevailing sentiment was doubt and disbelief of rally. Now that the folks have been properly conditioned to expect a rally after this cut (what a "surprise" it will be if it is less than expected), we are perfectly set up for what looks to be happening now. Buy the rumor, sell the fact and the reverse - sell the rumor and buy the fact has been an ongoing and reliable phenomenon IMO. Not a good stand-alone trading system but good to keep in mind. As always, time will tell! Regards, Eichler

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