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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony, -- Ignore unavailable to you. Want to Upgrade?

To: Master Trader who wrote (44149)	9/7/1999 6:37:00 AM
From: Stcgg	Read Replies (1) \| Respond to of 122087

Excerpt from The Elliot Wave, September 3, 1999.. The market was oversold and waiting for any excuse to rally to relieve this condition. Today's release of the employment report provided the perfect backdrop for a surge higher. In last night's Special Short Term Update, our analysis and labeled chart called for today's rally, as long as the lows of Thursday remained intact. As we outlined last evening, this push up is wave (c) of Minute wave two, which traced out an upward flat correction. Our chart tonight illustrates that the [Dow Industrials] may try to make a stab at new highs on Tuesday, but it and the S&P indices are very close to completing all the necessary subdivisions for wave (c) to be considered finished. Thus Tuesday should see a top to this rally. Fibonacci resistance in the [Dow Industrials] is 11123, then 11177. In the [September S&P futures] it is 1368.60-1370. In the S&P cash it is 1364.15-1366.05. In the OEX it is 715.40-716.46. In the Dow Diamonds it is 111 14/32-112 and in the S&P Spiders it is 137 2/32. These levels should repel any attempt on them in Tuesday's trading session. A close beyond these levels would force us to consider greater bullish potential for the blue-chip averages than we currently foresee. Despite today's rally, the Dow still ended the week slightly negative. The week's big winner was the NASDAQ, as speculators rushed back to the computer stocks. For the week the NASDAQ was up just over 3%. Interestingly, today's activity has provided us with another big non-confirmation (a bearish sign), as the NASDAQ pushed to new highs today unaccompanied by any other major index. Today's big point gain occurred on light-to-moderate pre-holiday volume. But breadth was the story today: it was strong, no doubt about it. The NYSE advance/decline ratio closed at 3.23:1, and this was after a very weak reading yesterday of .41:1. The last time breadth was this strong was right after the October bottom of last year. We've analyzed breadth statistics back to the 1920's and we found that after the 1929 peak, there were huge positive breadth days, some on the order of 12:1 positive. Yet two weeks later stocks were actually lower. This is what happens in a true bear market. Now, we did not adjust for issues traded at the time, but today is significant in this sense: if the market is able to record a strong breadth day like today and stocks do NOT follow-through to the upside, then we know this market is in serious trouble. So the next couple of weeks are very important. Finally, despite today's large gain, there were still more new 52-week lows on the NYSE than highs and fully 63% of NYSE stocks are trading below their own 200-day moving average. Bottom Line: anywhere between today's intraday highs and the above cited resistance levels I will be looking for signs of a top, and that Minute wave three of Minor wave 3 or C down is starting. This next leg lower should be a steep fall, with breadth worse than .39:1 (the weakest day in wave 1 or A down). It also should carry below the August lows. So stay tuned; whatever transpires, it should be a wild ride! The [September NASDAQ 100] and other OTC indices pushed to new highs today, alone among the major indices. The near-term pattern has been clouded by this move to new highs and I can now count these markets several different ways. None stands out above the rest, so I am turning neutral until I have a confident opinion. I will say that if the blue-chip averages top on Tuesday, these indices should likewise fall starting sometime next week. Steve Hochberg, Editor