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

To: dennis michael patterson who wrote (21233)	7/28/1999 12:24:00 AM
From: Lee Lichterman III	Read Replies (2) \| Respond to of 99985

I ran my charts tonight and started with the indexes including the sector indexes. I have to say, they almost ALL looked bullish with most of them displaying tweezer bottom formations like this bounce is for real. Then I started working on the stock charts. A whole different picture emerged. Small retraces, conflicting volume etc. Stocks look sick for the most part. A few put up impressive moves but they were also the stocks that tend to suck in the greatest number of fools like my favorite MU. It is almost in shorting territory again but I know they can pump it a lot higher before all the J6P money is secured for the robbing so I will wait. Still, there were morning bounces in many stocks only forthem to give it back by the end of the day. Also looking at a few intra day charts, I saw that many stocks were actually down with heavy selling only to spike upwards on the close to make the numbers look good tonight for the evening news. I think this could either be a short rally till the end of the week, or this could be one heck of a bear squeeze that could last a while before finally caving in later in August. The mid term cycles show this could actually last a while so I am in no hurry to re-engage on shorts but will not be foolishly be rushing into longs either. I think that this is not a time to go for the homerun trade. A few bargains here and there that if things get slammed before the open, they are already cheap so the fall could be limited type trades. I see some fairly heavy resistance at OEX 710. I will gauge the strength as we try to approach that area. I am really tired so I am calling it a night. Hope some of this makes sense as I am rambling I am sure. Good Luck, Lee

To: dennis michael patterson who wrote (21233)	7/28/1999 1:15:00 AM
From: James F. Hopkins	Read Replies (3) \| Respond to of 99985

Dennis; That was well a written IFY that said 10860 was or is support, and 11000 is resistance , but he sees a rally that I don't see, today may have been it. -------------- I'm working late and changing my basic Head/Tail indicator around, now looking more at dollars traded, via 3 month average volume. ( like where is the Action at most often ) unbelievable AOL has the most money swapping hands with $2.178 Billion a day on a 3 mo average I would have never thought it..holy mackerel.. MSFT is second $1.077 B , thats right AOL is trading TWICE the Dollars MSFT is trading.. Keep in mind Volume on the NAZ is to be 1/2 to get apples to apples with NYSE volume as THe MMs count the NAZ vol coming and going and NYSE just counts the trade as 1. ----------- Here are the Top traded STOCKS $ wise on a 3 month Avg volume to price WATCH THEM as a group they will tell you which way the money is flowing before the rest of the market catches the move. ALL $ in Billions per day 1 AOL $2.178 ,2 Msft $1.077 , 3 IBM $ .750 , 4 INTC $.660 5 T $.617 6 LU $.620 , 7 GE $.545 , 8 YHOO $.530 , 9 CSCO $.477, 10 WCOM $.473 ---------------- This list will change but I'm now certain that watching the cash flow on the most heavily traded stocks, & comparing that momentum with the broad market gives not only the direction but the MO MO , Lets say as a GANG the above are up 3% by noon, the S&P up 2% you know she is going on up But by 2:30 the GANG is up still only up 3% and the S&P has caught up, well Mo Mo is falling off BAD, you can get short the index on the spot if either one starts down even a little. Big money ran out of steam or the GANG would have held it's relative lead. Jim PS I use to put a lot a faith in how BIG caps rolled the index particularly weighted indexes, but I'v come to see $ LEADERSHIP is more important while it changes from time to time.. and the $ leaders have to be redefined, using the 3 mo avg volume X price will serve good enough to tell you the most popular stocks traded $Dollar wise the way they go and the speed they make will lead the market along. Major Reversals of $ will also show up in them first. "the old Follow the money rule " is in this. And it's the most simple and best indicator I'v found to date.