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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 665.67

-0.9%

Nov 17 4:00 PM EST

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To: Casaubon who wrote (9942)	4/6/1999 8:55:00 AM
From: Les H	Read Replies (1) of 99985

Ord Oracle BOTTOM LINE ON THE MARKET. April 5, 1999 WHAT TO EXPECT NOW. On last Thursday commentary, we said, "Yesterday a signal for a top was triggered both my completing the third gap of a Candlestick pattern called a "Three Gap Play" and a candlestick pattern called a "Bearish Engulfing". We haven't interred into a put position yet because the ARMS Index closed yesterday at 1.37. Normally when the ARMS Index closes over 1.30 a short-term bounce in the market is likely (which it did today). Judging by symmetry on the June S&P's this potential bounce (or consolidation) may last into most of Monday." Indeed this bounce did last into Monday rallying 175 Dow points. We were not expecting this strong of a bounce however. We were only looking for a bounce to the 1305 area on the June S&P's. However, the bearish picture is still present. On the weekly candlestick chart on the June S&P's for the week of March 19 a Bearish "Shooting Star" was drawn. Most "Shooting Star" highs are re-tested. The high on this "Shooting Star" Was 1337, the all time high. Also on March 19 on the daily candlestick chart a "Dark Cloud" Cover was drawn. A lot of the time a "Dark Cloud" Cover high is also tested which is also 1337 on the June S&P's. The intraday ARMS Index stayed consistently near .55 all day today and closed at .57. This type of condition appears near short term highs. The conditions are setting up for a short-term top near the 1337 area on the June S&P's. No bearish candlestick pattern was drawn today, therefore no signal for a short term top.

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