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Strategies & Market Trends : Paint The Table

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To: Patrick Slevin who wrote (2125)	11/15/2001 4:45:55 PM
From: John Pitera	Read Replies (4) of 23786

have you seen the explosion in interest rates the past few days....whoosshhh..... this is a huge bell ringing. host.wallstreetcity.com host.wallstreetcity.com this rally is on really borrowed time , we'll see at least a few week pullback in prices..... in the best case, or some real equity selling in the worse case. I posted this yesterday afternoon..... here are the 200 dma levels for some of the averages NASD 200 dma is 1997 (Day Moving Average--Simple) SPX 200 dma is 1190, we were at 1150 yesterday so only 3.5% below the 200 dma. DJIA 200 dma is 10211 RUT (the Russell 2000) 200 dma is 468 and we were at 452 this morning. Statistically the market just about never, able to just blow through it's 200 dma's when it's been such a large percentage level below it's 200 dma as we were on Sept 21st when we made the autumnal equinox bottom. More typical price action would be a price pullback, that lasts for a number of weeks as these indicies hit their 200 dma's. Now since the hedge funds and other macro managers know this they are likely doing some selling right now since we're getting pretty close to these levels. And they have to anticipate market moves, since they are dealing in size. just look at the very large volume today: 11:38 ET Volume : Total volume traded is decidedly heavy today. The Nasdaq has already cleared 1 billion total shares traded while the NYSE has had 618 million shares cross the tape. and note EMLX...... EMLX has gotten back to it's 200 dma in the past 5 days or so and after not being able to close above it with authority; itis now falling back below it today. obviously profit taking and shorts have been established at the 200 dma. QCOM is another stock that is failing at it's 200 dma and pull back to 48 over the next few weeks. NOW FOR the BEARISH argument.... In Bear Markets you have great secondary selling and shorting opportunities on these rallies back up to declining 200 dma's. It's very possible that the market is setting up for a retest of it's Sept lows. We have had the greatest monetary stimulus of the entire existence of the Federal Reserve, since it's creation in 1913, and we've seen the biggest bubble pop since 1929 here and 1989 in Japan.

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