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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Step1 who wrote (17651)	6/17/1999 8:16:00 AM
From: pater tenebrarum	Respond to of 99985

Stephan, i have to say that the strong positive reaction to the CPI data puts a big dent in the bearish case. had the market faded in the afternoon, i would have seen the rally as a fake. unfortunately it is also hard to take a strong bullish stance here. the reason for this is that ind.equ. put/call ratios have reverted to very bearish readings on the back of yesterday's gain, and any rally that is greeted with so much enthusiasm usually doesn't go very far. still, at this point i think that after a brief period of consolidation, the rally could be extended for a while in the short term. the chart formation on the COMPX, which at times made the impression of being either a rounding top or a h&s could turn out to be a bullish contracting triangle, which would point to new highs in the not-too-distant future. a strong impulsive advance such as yesterday's is hard to dismiss. it is very unfortunate though that the correction never saw a washout on heavy volume, which would have made it easy to take an unequivocal bullish stance. but then, the market has a habit of being hard to read, especially lately. with regards to the nikkei, i tend to agree that pullbacks should be bought. i'll post more details on this view later on. let me just say for now that i see quite a few reasons to remain bullish on japanese stocks. there is a remote possibility of another leg down to complete the larger scale bear market, but this looks less likely by the day. regards, hb