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

To: Vitas who wrote (17914)	6/21/1999 12:07:00 AM
From: Bull RidaH	Respond to of 99985

Vitas, When long bonds hit 6.125+, I knew that was it for the bond selloff based on the bond chart pattern, so whatever downside had occurred in the equities up to that point was going to be about it. Plus the 73 day cycle low due Monday held beautifully going forward, and the cpi induced rally on Tuesday salted it away. As it turned it, it wasn't an ending diagonal from the May 13 peak, but a straight forward 5 wave move down. What tricked me was the wave 4 overlap on June 4th & 7th, and led me to believe this might be an ending diagonal. EW guidelines state wave 4's CAN overlap into wave 1's price territory, but can't stay in that zone for more than a couple days and not much more than 15% of the size of wave 3 into wave 1's territory. This wave 4 stretched these limits but did not break them. Just look at a daily chart from 5/13 til now and you'll see this 5 wave move very clearly. Further confirmation came this past Thursday when 6/7's high was taken out, and the ultimate confirmation will be when 5/13's high is taken out. If that occurs, the possibility of a large bearish move is virtually nil, with maximum downside back to the start of this new bull leg, which was from Friday June 11's low. As long as this past Monday's low of 618 NYSE holds, I have full confidence in this read. Regards, David P.S. Hop on a plane and get down to Myrtle... The fish are bitin!!<g>