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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 695.42

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Jan 28 4:00 PM EST

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To: donald sew who wrote (15648)	6/2/1999 6:22:00 PM
From: Les H	Read Replies (2) of 99985

DP Forecast Update decisionpoint.com BOTTOM LINE ON THE MARKET. Ord Oracle. June 1. For the last four trading days on the June S&P's, it appears the market has been in a trading range. In trading ranges (or consolidation patterns) the volume decreases as the market works sideways. You will notice on the graph above that is what is occurring now. If this pattern is indeed a trading range or consolidation pattern than this pattern should market the ½ way point of the move that began on May 20. From the high on May 20 to the next low on May 25 the market moved down 70 S&P's points. From where ever this consolidation patterns ends (which may be near the 1300 to 1305 area on the June S&P') the market should move down another 70 S&P's points off that high. This gives a downside target to the 1230 area (we had this number before on our previous projections). We noticed a lot of times inside consolidation patterns that the market will reverse three times making three tops and three bottoms. This current pattern has so far two tops and three bottoms (it shows up on a 10-minute bar chart). The June S&P's is making attempt to rally back and make a third top now. On today's rally a +921 uptick reading was recorded. On Friday a +990 uptick reading was recorded near the 1305 area which implies that is a stiff resistance area. The tick index readings suggest the market is making a short term top now and is the reason we bought a ½ position in puts today. A bearish candlestick pattern called a "Hanging Man" formed today that coincided with the second high down-tick reading generating a sell signal. However to confirm this signal, tomorrow close needs to be below today close. If that happens, we may add the second ½ put position. Down-side target is 1230 area on the June S&P's.

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