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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 670.21

-1.1%

Nov 6 4:00 PM EST

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To: Mike M who wrote (80639)	7/21/2001 5:58:12 AM
From: ig	Read Replies (3) of 99985

Rally In addition to the p/c volume ratio you mention, there are additional reasons to expect a rally: 1. Descending wedge: dtraders.com (Reflects compx and ndx, but I just happened to have this QQQ chart ready.) 2. Overnight last night, the bears were orgiastic (see the CFZ thread). MSFT bad news was supposed to send the Dow and Naz straight to Hell. Came the dawn, the bears trudged back to their caves, muttering bleak nothings to themselves all the way. 3. Not only did MSFT fail to tank the market, it couldn't even push the market below the July 11 low -- so compx shows a nice higher low on (especially on 60min chart), finishing up nicely off the lows of the day. So big deal, MSFT projects lower revs this quarter. No Kidding! Everyone knows WinXP isn't going to set the world on fire. Who expected anything different? We who time the effects of the Fed rate cuts knew Q2 earnings were going to be poor. We also know that those who are disappointed the economy hasn't turned around by now are simply premature. The current negative reports are exactly what the "Don't Fight The Fed" crowd are expecting. Anyone who is surprised or disenchanted by these negative corporate earnings reports just doesn't get it. Upside earnings surprises are expected to begin in Q3. Anyone who understands this also understands why MSFT didn't trigger the China Syndrome today. I got long QQQ August 43 calls 10 minutes before the close today. Near-term target is 44+. ig www.dtraders.com

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