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

To: HairBall who wrote (18710)	6/28/1999 9:06:00 PM
From: pater tenebrarum	Read Replies (1) \| Respond to of 99985

LG, <<stockycd: Do you think this is a bull trap?>>, as Haim has pointed out over on the Kahuna thread, the put/call ratios say it is. they spell complacency, as does the VIX. sometimes this changes as a rally progresses and is met with disbelief; however, i doubt this will be the case this time around. the 'summer rally' conditioning is so ingrained, that conviction far outweighs disbelief at this stage imo. note also that there is anecdotal evidence of wall street strategists looking forward to the post-rate-hike scenario with optimism. the expectation of strong earnings is frequently cited to lend support to this optimism (Peter Canelo of MWD is an example, but he is not the only one.Mike Holland expressed a similar view today, and the general tone of interviewees on CNBC is along those lines). no-one even mentions the market's extreme overvaluation, so we should remain wary and cautious. if there were a lot of worrying about the market's unsustainable levels and predictions of an imminent correction discernible, rallies would be more deserving of the benefit of doubt. the same analysts that were calling for a correction following the jan.-march consolidation are calling for higher prices now. it happens at times that the market continues to trend sideways when bullish sentiment is high and starts to rally when it has sufficiently decreased. but rallies with the CBOE total ratio at 0,42 are rare and usually short-lived. regards, hb

To: HairBall who wrote (18710)	6/28/1999 9:16:00 PM
From: Lee Lichterman III	Read Replies (2) \| Respond to of 99985

Concur on your statement about our legal system and morals of the country. I do wonder why you are so sure that the DOW is forming a bullish wedge though. I have stared at this chart for over a week now and can't decide for sure one way or the other but I lean toward it being a descending triangle since the base line angles up slightly instead of downward as in a bullish wedge. I admit I am not sure enough to call it either way though. I won't make a decision until it clears the 10750 area and holds it for more than 3 days since many of the other descending triangles had false breaks upward that reversed and tanked about 3 days later. I haven't downloaded my data so maybe my view will change tonight but so far, I am still on the fence. PS - For those I didn't PM, I am temporarily doing a different job ( First Sergeant) this requires long hours both early in the AM and late at night so my analysis will be short and brief if at all. Probably not at all. Good Luck in this directionless drifting before the explosion one way or the other soon. Lee

To: HairBall who wrote (18710)	6/28/1999 9:26:00 PM
From: stockycd	Read Replies (3) \| Respond to of 99985

Lg, Man, I'd like to think so but...Most of my indicators are saying down but a lot of the chart patterns for the major indices seem to be saying up. It almost seems to me that the market has developed a certain arrogance about itself by rallying into the rate hike. It is not healthy for the market to shrug this off. There will only be more pain later. And hopefully all of this Clinton debt payoff nonsense faded with the closing bell today and we can refocus. Another thing that has me bothering is the turn around of Abby J Cohen. (not that I put any faith in analysts<g>) She has been the freaking bull of bulls and her speech last week almost floored me. It's hard for me to see more than 1-2 weeks out but, if the result of this meeting is a hike plus a continued bias, it will be good to be short! Chris