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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 652.53

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Nov 20 4:00 PM EST

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To: KM who wrote (7259)	3/1/1999 8:10:00 PM
From: donald sew	Read Replies (2) of 99985

INDEX UPDATE ========================================== In the recent past I was more inclined to say that the market was in a trading range; however my position has changed and we could see a strong downmove within the month. The divergence in the NEW HIGHs is getting ominous. It is easy to notice that since JAN the peaks in the NEW HIGHs are getting lower while the DOW was relatively flat. I feel that this is one of reasons for calling a strong down move within a month. I normally am reluctant to give price targets, but I feel comfortable that the decline will take the DOW below 9000 and there is a strong support around 8700. This pullback should take place as long as the the market internals do not improve dramatically, which I dont think will happen just yet. There is also a chance that this pullback could be even moer severe and take the DOW below the 8700 support area. It may not happen in one swoop but may take a subsequent down cycle if it does happen. For now my position is a break of 9000, but could be worse. Any nice upspike may be a good time to initiate PUTs. Hey, Bears, ya got company. seeya

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