MDA - Market Direction Analysis Message Board

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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 683.34

+0.2%

Nov 3 4:00 PM EST

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To: bobby beara who wrote (76924)	5/13/2001 2:06:39 PM
From: t2	Read Replies (2) of 99985

volume on nas friday, third lowest of last three months. vix coiled, ready to move the pattern on the dow, looks like a rising wedge, the pattern on the nasdaq looks like a bull flag, the spx is a tweener. BB, Are you turning bullish again? What I find really interesting is that the "overbought" condition has disappeared. May not be a big deal but seems to right in the last few weeks...as in this chart. clearstation.com To me, that Nasdaq looks set to start a major move with 1 or 2 days but lasting at least about 2 weeks...at least to the end of May 25. The first move on the Nasdaq from the lows to about 2200 lasted about 2 to 2 1/2 weeks. Which index looks better to you. I am picking the Naz. I still don't get the significance of the VIX. Has not been much of a predictor except when it reached high levels in early April along with the VXN. The volume being low is a great indicator most times. More importantly is that the Naz stopped going down in bigger percentages during periods of light volume. A 40 to 60 drop on Friday would have been a bad sign even if volume is light. To me the fact that many traders seem to expect a sell on the interest rate cut is a reason to believe we will be heading higher after the cut. A 25bp cut would also be bullish as it would point to recovery gaining steam in the economy....call it "FED Confidence"..and that has to translate to consumer confidence later as well. The only bearish scenario I see out of the FED is a 75bp cut. That would indicate a lack of confidence in the economy. IMHO, 25bp would be ideal along with a strong statement on future rate cut possibilities.

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