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Strategies & Market Trends : Point and Figure Charting
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To: wizzards wine who wrote (7339)9/16/1998 12:40:00 PM
From: Dennis J.  Read Replies (2) of 34809
 
Hey Preston! A word of caution.

Please look back at my posts 7335 and 7058, and also some of Option Jerry's posts.

While there may be bullish reversals abounding, this is still a very ugly market. And October is still ahead. Then tax selling season.

Many stocks and averages are below their 20, 50 and 100 day moving averages, and maybe even below the 200 day ma. I just looked at the Dow chart, and the 4-day ma has not yet crossed the 9-day ma. The weekly ma's are still crossing on the way down.

In this market, bullish reversals just identify a better-than-average correction. This would be ok in a bullish trending market, but I doubt we have one any more. While they measure recent supply-demand, they don't predict.

John Murphy's weekly commentary notes: "We still think the 7000 level will be tested before the end of October".

Perhaps Tom Dorsey's saying is appropriate, one he uses with his Trader's Column. He reminds the reader that his recs. are for traders only, and for those who "like to look for dimes in front of bulldozers".

Of course, I could be wrong. So make your own decisions. I still plan to be sidelined for a while longer. The good buys of today may become even better buys later.

Dennis
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