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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: donald sew who wrote (8110)	3/13/1999 9:15:00 AM
From: Casaubon	Read Replies (2) of 99985

The daily 120 period analysis: iqc.com for the harami pattern to be valid, the second line must be completely engulfed by the previous periods pattern. In this instance, the upper shadow (the high of the day) just barely surpassed the previous high, making this a bearish doji reversal. The reversal is validated with the RSI just touching 70, and tagging the upper bollinger band. The %K peaked at the similar height as November and January's maxima and turned down towards %D (%K will probably retrace some of the move up and bounce off the %D line to make another stab at 10K later next week or early the week after.) The ADX is above 50, so implies the DMI is a valid signal. The DMI has the +DI in a downward correction stage. The +DI just crossed under the ADX signal and I believe this implies and reinforces further downward consolidation. The weekly 120 period analysis: iqc.com The weekly chart still shows a valid bullish candlestick pattern on rising volume. The RSI is only at 58 and so still has upward momentum capability. The RSI has been making a series of lower highes, on this scale, and I believe this trend will continue. Look for the top of the market when the weekly RSI touches 70. A least square analysis of the RSI maxima would probably confirm the RSI (I eyeballed it). The %K is in an uptrend with a value of only 77%. Previous maxima have occurred near 100%. Look for this trend to continue. The ADX is only 46 (50 is really required for a valid signal), but I believe the other signals confirms that the weekly ADX will rise above 50 and the +DI will continue it uptrend, indicating there is still some upward momentum in the market. My conclusion: Look for the top of this market when the weekly 120 period RSI reaches 70ish and the weekly stochastic touches 95-100 and then crosses back under %D. That will signal the turning point. All criticism is desirable!

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