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

To: donald sew who wrote (19479)	7/6/1999 12:18:00 PM
From: Robert Graham	Read Replies (3) \| Respond to of 99985

The three day cycle is definitely something to be aware of, thanks to Donald Sew. However, picking them out is difficult when one or more days has been "postponed" in the cycle by strong up or down days by longer term position money. And then there is a constantly moving up price because of strong accumulation of the stock. Today was to be a "down" day for NASDAQ while an "up" day for YHOO. YHOO earlier broke out from a flag pattern which has not been resolved yet to its price objective. A minature flag formed above this flag with price advancing. Good price action. YHOO was ready to roll. So I suspected YHOO will lead the NASDAQ market up today like it has in the past. This is what now has appeared to have happened. Furthermore, the NASDAQ will begin to attract money away from the DJIA, and a down or flat day on the DJIA will actually help this along. So I expected a down day for the DJIA and an up day for the NASDAQ. I think this is a strong market run that we ar in which will float many boats. It pays to understand market dynamics. And that three day cycle that Donald here brought to my attention through his very good work is IMO a very important market dynamic that every very short term trader and particularly day traders needs know about and understand how to use. Another is that of rotation between groups of stocks performed by the day traders within this three day cycle of the market. The stocks that are being accumulated by the big money are continuing up throughout this cycle while the stocks that moved up three days ago have resumed their progress. I do understand there is no clear cut distinction here between a "1st" day stock, a "2nd" day stock, and a "3rd" day stock. I see it has allot to do with finding other stocks that have not appreciated when the first set was traded up or still have good price action to warrant trading further. And some of those stocks may continue up for one or even more additional days as mentioned above. In the present market, I do not think traders would have to reach outside of the tech sector to find good candidates to trade on "off" days. I wonder how this applies to sector rotation that I see where there are sectors in the lead on "off" market days different from the original group that lead on "up" market days? Also is there a good up-to-date book on picking out cycles, particularly the three day cycle? Comments welcome! Bob Graham