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

To: pater tenebrarum who wrote (18526)	6/24/1999 11:20:00 PM
From: HairBall	Read Replies (2) \| Respond to of 99985

heinz: The Dow 30 coming off the first of the year formed a falling wedge, a bullish formation. Many were calling it a descending triangle and where expecting the formation to break to the downside, I did not. I expected a break per the norm for a falling wedge and a rise into April. The Dow 30 is currently in a bullish triangle. The Transport are currently in a falling wedge. The lower trend lines should hold. However, the UTIL fell out of a rising wedge, which is a bearish formation and should have some more downside. Regards, LG

To: pater tenebrarum who wrote (18526)	6/25/1999 5:43:00 AM
From: bearshark	Read Replies (2) \| Respond to of 99985

Heinz: My statement about what I see is based on market internals, the chart I gave, and a few other things. I do not consider any of the moving averages. The TRAN could end up in a head and shoulders with a little more development. There are many key indexes in trouble. I posted that the IIX, under Dow Theory, had ended its up-move. The DOT can be thrown into the same category. However, both formed distinct symmetrical triangles. Using the Nasdaq volume, the volume declined during their formation. So I consider them valid. The IIX and the DOT triangles must cross at their apex to negate their current bear market. Those numbers are at 325 on the IIX and 635 or 640 on the DOT. The other difficulty is the SPX. It went to the midpoint of its recent resistance earlier this week and broke down and started dropping. For that matter, the IIX and the DOT did nearly the same thing. The only way these problems can be turned around is with increased volume on the upside. This is not a few shares either. It must be 130 million shares in the first half-hour of trading. Currently we are around 90 million. In the fake breakout of last week it was 115 million. 130 million must be acheived. An 825 million share day on the NYSE also must be achieved to validate the first half-hour. Last week after the initial 115 million share half-hour the voilume died--so did any chances of a long-lasting rally. Today could be an awful day too. These things are not precise but I cannot ignore them. They work. The key and only thing that can validate what I said is volume on the upside. That volume must be present without any qualifications.

To: pater tenebrarum who wrote (18526)	6/25/1999 7:17:00 AM
From: bearshark	Respond to of 99985

Heinz: Here is the INDU chart. beta.iqc.com The current triangle with its declining volume through the pattern (the spike from last week was option expiration related) has a bottom slightly under 10,500. That was approached yesterday. It may be approached again today. If we break through that bottom, there will probably be a little cup forming at about 10,200 - 10,300. Without going back to the chart, I am guessing that the apex is at about 10,700. So if we drop out of the triangle, we should get another shot at puts around 10,700. Of course, the decline out of the triangle may be confirmed at the apex by the failure to move through it too. If the volume is strong on the up-move, then I will not worry about the puts. We are dancing on the pinpoint. Everything depends on patience, correct reads, and the willingness of the big money to make a decision--one way or another. I used the above chart because it shows the breakout from the ugly formation around the beginning of March. When the real move started, we had the increase in volume.