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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 676.47

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Dec 18 4:00 PM EST

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To: Impristine who wrote (5393)	2/4/1999 12:58:00 AM
From: donald sew	Read Replies (2) of 99985

INDEX UPDATE ================================= With todays performance there may now be a PENNANT or BEAR FLAG forming, both implying negativity. On the last 13 trading days, the majority of the intraday highs have stayed within the 9300-9400 range. I realise that when the market dropped a few days ago, some bears came out calling for big drops and when today was up strong the BULLs came out calling for the big runup. In other words the DOW really has not gone anywhere with any significance. During this up-down period both strategic CALLs and PUTs have been profitable. Its that darn STAIRSTEP that will probably whipsaw most. I am more negative than positive, however I will not underestimate the the possibility of a big drop or a big runup. I just try to objectively read the technical signals. I mention this since I am noticing more emotional reads in both directions, and just want to address that emotional trading is commonly not too productive. So rather than have BULL/BEAR battles, lets just share our opinions. With todays upswing my SHORT-TERM technicals are back in the upper mid-range near the overbought range again, and if the market continues straight up, then the DOW will reach a CLASS SELL signal in 1-3 days. That is not to say that the market could not reverse down immediately, just that if the DOW continues up it will reach the extreme overbought region in 1-3 days. The UPPER TINE of the MAIN PITCHFORK will be around 9450 tomorrow and should be a strong resistance. A significant and enduring break of the UPPER TINE will imply further upside. It is not uncommon for overshoots of the TINEs only to be drawn back into the PITCHFORK. In this way the TINEs are different than the common trendline/support line/resistance line. It is probably best explained as a magnet. Seeya

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