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Strategies & Market Trends : Systems, Strategies and Resources for Trading Futures

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To: Teresa Lo who wrote (22696)	5/19/1999 12:54:00 AM
From: Teresa Lo	Read Replies (1) of 44573

Market Snap Shot After breaking out of a two-month consolidation in March the market was on a steady uptrend until the end of April, after it completed three waves up on the daily chart and began another consolidation. For almost three weeks the market has been locked in sideways trading, with ADX (average directional index) dropping to confirm. The marginal new and 20 day high of 1382 made on May 13 did not follow through, setting up a Raschke Turtle Soup or Trader Vic 2B top, a short term sell signal. We have put parallel red lines on our daily chart defining the trading range. Over the past three sessions, the June S&P futures has traded down through it's 20 day exponential moving average where support normally lies in a strong uptrend. It has now tested the 50 day moving average in addition to the uptrend line twice in two days, an area where small sell offs find buyers to buy the dip. So far the market has been weak and has not been able to put together a move to the upside. The market must successfully hold the 50-day moving average to maintain the uptrend and if the 1325 area is broken on a third test, then support at 1319 will be key. Support is also seen at 1309.50 and 1290.50. Resistance overhead is at 1348, 1376.10 and 1382 on the June S&P futures. With Robert Rubin's resignation and the FOMC's decision to lean towards tightening monetary policy, there are valid reasons for long term fundamentalists to believe that America's decade-long disinflationary expansion may indeed be drawing to a close, as the dream team that presided over the economy fades into history. We analyze S&P 500 stock index and Treasury bond futures because these two contracts lead the market and overnight trading sets the tone for the open in New York. Individual investors can take advantage of index-based investments by visiting the NASDAQ Amex market site to research SPYDRS, Dow DIAmonds, and NASDAQ 100 QQQ at options.nasdaq-amex.com Charts and update posted during the trading day at the site.

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