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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 671.91

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Nov 14 4:00 PM EST

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To: Jan Robert Wolansky who wrote (2658)	12/22/1998 7:54:00 PM
From: dennis michael patterson	Read Replies (1) of 99985

Favors: here is what he says after getting out too early. Amazing. And he writes as if the Dow is the only market worth looking at. Jerry Favors Analysis - Tuesday, December 22, 1998 8 p.m. At the lows this morning the Dow was down as much as 40 points and at the highs the Dow was up as much as 80 points. We closed up 55.61. While the Dow closed up 55 points the breadth at the close was once again poor,showing an unofficial 1744 declines to 1240 advances. That is terrible breadth for a closing rally of 55.61 points. Breadth throughout this rally off last Monday's lows has been poor. This poor breadth since the December 14 lows is a serious problem in our work and does not bode well for the Dow after this period of normal seasonal strength evaporates. And it will evaporate fairly soon. The cycles still call for some sort of short term high near December 22 plus or minus 2 days,and we are in that time frame now. We are not convinced that we have seen the highs quite yet. However we do believe that we are at least near some sort of short term high.Our hourly charts did not give a short term sell signal today. However a decline below 8948 on a print basis tomorrow will give a short term sell signal off the hourly charts. This would be a signal of lower prices ,at least short term. The 5-Day RSI on the Dow closed at 69.80,still just below the overbought zone of 70. Any further up close will take the 5-Day RSI into overbought territory. As of today the RSI is not yet in true overbought territory. Any decline below 9019 on a print basis Wednesday morning will signal lower prices early tomorrow. This could lead to a test of 8948. For now we will hold current positions and we will give you new instructions tomorrow evening at 8 pm.

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