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

To: pater tenebrarum who wrote (22548)	8/9/1999 8:03:00 PM
From: Benkea	Read Replies (1) \| Respond to of 99985

The Bottom Line Excerpt from the EWT ST Update for 8/09 "The most compelling message the Wave Principle allows me to deliver tonight is this: short-term charts reveal all declining waves have traced out "fives," while advancing waves have been "threes." Those of you familiar with Elliott know this tells us that the trend of the blue-chip averages is still down. Odds strongly favor that we have not seen a bottom to the current sell-off from the 11252 peak. The big story not being told by the mainstream financial press is just how weak the market's breadth continues to be. The NYSE cumulative advance/decline line has broken decisively below its October 1998 and March 1999 lows. The a/d line is now back to where it was in April 1997, when the Dow was 35% lower than now (6962 in April 1997). Market commentators are quick to dismiss this near historic divergence because the a/d line is not a good short-term timing tool. In my experience, this is a major mistake. When the divergence between the average stock (which has been in a bear market for more than a year) and the market leaders becomes this large, history shows that the leaders are the ones that run into trouble, not the other way around. For short-term timing we always turn to the Elliott Wave patterns: as I mentioned above, their message says stocks have not yet seen a low. Either a series of first and second waves have traced out from the 11252 all-time peak, or the Dow is just now finishing up a small-degree fourth wave triangle. In either case the next significant move should be down. Many technicians are watching chart support between 10409-10471, as a key support area. Our work suggests this support area will indeed be violated as the Dow slides to the next Fibonacci support near the 9780 level. Watch 10409. Once the Dow closes below it, a lot of selling should enter the market as participants start to become concerned. Strong near-term resistance is 10830. A close above this level would instead indicate that a five wave decline from 11252 ended at last Thursday's 10566 low and the index was in a bounce to correct this initial impulse wave down. At this juncture, only a very unexpected close above 11031 (July 27 high) would force us to re-examine the bearish pattern. We'll discuss this only if market action warrants."

To: pater tenebrarum who wrote (22548)	8/9/1999 8:21:00 PM
From: TRINDY	Read Replies (1) \| Respond to of 99985

Heinz, I greatly appreciate your contributions to this thread. Thought I would offer a few comments on current happenings. My own personal set of indicators (I attempt to identify trends) show considerable weakness and distinct negative trends in just about all major indices, with the exceptions of the DOW and UTIL. The latter are flat, at best, and have recently been in negative trends that are now moderating. One could even make an argument that the DOW should be bought here. Same for the UTIL. I track three A/D signals. One is a cumulative advance/decline, another is volume weighted A/D, and a third is A/D weighted by the TRIN for that day. All are in considerable retreat, highly negative trends as you might expect from activity dating back to mid July. There has been essentially no moderating of these negative A/D trends since the reversal in mid-July. Why the DOW has not been impacted to a greater degree is a curiosity, indeed. Big cap techs remain intact, as well. Unless we can get below 10,400 soon, in my estimation, there may not be much lower to go. Also it appears that we need to drop another 100 points on the NASDAQ to instill fear, doubt and loathing of the market. We are on the precipice, but it is not clear that we are going to fall off. My surprise, and yours as well apparently, is how well the semis are holding up. It borders on the ridiculous for AMAT to be up +4 and INTC and MU are jokes, as well. As long as these stocks keep laughing off the broader market declines, I doubt we are going much lower on these broader averages. The market is directionless at present, IMO. If the DOW and the big cap tech stocks demonstrate weakness, we could be in for another round of big-time down. I don't see it happening, but doubt that we are going to see any big time up either. We are in a quiet time of relative equilibrium on stocks. We can all use this breather to gather our thoughts and make plans for future trades. Frankly, I can use the rest. Again, thanks for your contributions and keep them coming.