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Strategies & Market Trends : MDA - Market Direction Analysis

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Nov 14 4:00 PM EST

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To: StockOperator who wrote (10167)	4/8/1999 12:20:00 AM
From: StockOperator	Read Replies (2) of 99985

There are certain times in the market that offer fantastic opportunities for wealth accumulation. Being on the ground floor of an internet ipo is one of them. However, many of us do not have the connections or deep enough pockets to be inside many of these deals. Then again there are some that enjoy running solo in the market. They're excited by climbing into the ring every day with the odds stacked against them. And although much pleasure can be derived watching that ipo double in a day. It pales in comparison to the feeling you get watching your account grow from decisions YOU make on a daily basis. That ipo required no skill. On the other hand, to trade and make money based off the fundamental or technical picture, requires a great deal of skill. Especially in an environment of extreme volatility and poor market internals. Compared to that, that ipo is much faster and easier. Fortunately for us there are times, similar to that ipo, when making money is almost as immediate. Whether your long or short the market does not matter. Only that you're read on things is correct and you position yourself accordingly. The breakout points on the charts offers the trader the opportunity for gains that would normally take years to make. A good example would be that break of the rising wedge on AOL's chart (3/15/99). You could have purchased shares all day long in the low 100's. Yesterday it hit a high of 175. Or how about QWST which just three days ago broke through resistance at 74. Today's high almost 89 (and climbing). What about YHOO which recently broke through 180. Two days later 244. Not all of these moves coincide with prices moving into new highs. You can often see huge gains as prices work through a heavily congested area. IMO, the tranports are in that situation right now. Yes identifying and trading those breaks can be extremely profitable. That's why after updating my charts tonight I got very excited. So many of the stocks that I follow, have prices at those positions as we speak. The indexes have also spent the last couple of months working their way there. It's all do or die now. Just like AOL before it broke through that wedge. Prices have worked their way into a area where only a decisive move will break the consolidation. IMO, all the indices are there right now. Over the next two days I will be keeping an eye on the Utilities and VIX (which is acting funny) Interest rates are at a critical point. Pay close attention to WCOM which had a significant break in prices. Similar to NSOL which broke down only to make a huge advance a day later. Watch to see is WCOM can rebound in price. GM is also worth watching in that it also gave back quite a bit today. With prices at breakout points on the charts. The indices are going to need all their major players to march in line for any advance to be meaningful. Good luck trading. SO

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