Wednesday, Oct 14 1998 11:02PM ET
Reply # of 55490
INDEX UPDATE
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Market internals improved slightly, but nothing to write home about.
My short-term technicals are in the OVERBOUGHT region(80-90), and a few CLASS
SELLS. Intraday I had calculated that if the DOW is up 100 points and closed there, it
would be a CLASS 1 SELL to obtain at THURs highs. The DOW did not close there and
the DOW is at 85 per my system. It can still move up tomorrow, but the upside is limited.
Now here is something interesting, at least I think so. On 8/7, 8/25, 9/2, 10/6 - the DOW
was up strongly(over 100 points) only to sell off significantly intraday and close
FLAT(plus or minus 50 points). Each of these days it also went negative, but the intraday
day up side was about 2 times+ greater than the downside(negative territory). Those dates
are when such formation appeared after an upswing.
In Candlestick talk, it formed a SPINNING TOP with the UPPER SHADOW about
double the length of the LOWER SHADOW. It did not matter if it was a black day or
white day.
Guess what happened the next 2 days in each case. In all the instances the next 2 days or
more were down, and in the case of 8/25 it was the beginning of the big downdraft from
8600 range to 7400 range.
Unfortunately, none of those dates happened during an expiration week, and we all are
aware how expiration week can skew things.
I am not saying that this will be the big drop, just something interesting.
I am still holding to my postion that the TOP of this specific short-term cycle occured on
10/12 when the DOW hit 8084. Unless 8084 is broken to the upside convincingly by about
50 points(8134), then I will still feel that this downswing is intact. It could just be expiration
week skewing things.
If the market does not pullback THUR/FRI, and 8084 is not broken to the upside, watch
out for Monday onwards.
Since my short-term technicals are not yet CLASS SELL status for the majority of the
indexes, the market could still move up some, but the upside will be limited.
Seeya
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