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

To: donald sew who wrote (26882)	9/23/1999 5:39:00 PM
From: pater tenebrarum	Respond to of 99985

Don, i was actually expecting today to produce a durable bounce...in any case, if there is a bounce soon, it should be sold imo. one has to remember that the cycles were pointing up into the end of September ST, and into the beginning of November MT. i venture to guess that this means the cycles are being overridden by another cycle of larger degree. if so, we could ultimately go quite a bit lower. the 'crowded trades' i have often mentioned are being unwound and the hedge funds which are long this market will be quick to reverse course when the technicals so dictate...let's not forget there are a lot of overleveraged players out there who are probably beginning to feel some pain right about now. add the losses in the massive gold short positions , in credit spread products and the Yen carry trades to that and you get a potentially very explosive situation. i don't want to sound too gloomy here, but European fund managers may decide as early as tomorrow that it's not worth the risk hanging on and that could lead to some sort of chain reaction with people trying to lock in what gains they have for the year. as i have mentioned on the myth thread, i'm sure the Nikkei was oversold all the way from 40,000 to 14,000...(actually i appropriated the quote from Stanley Druckenmiller of the Quantum hedge fund - to give proper credit). regards, hb

To: donald sew who wrote (26882)	9/23/1999 6:06:00 PM
From: Zeev Hed	Respond to of 99985

Donald, we got a lot of negative medium term signals today, including a Dow theory sell. But the Tick on the NYSE singularly indicates a possible bounce, it reached -1497, mind you -1537 was reached at the bottom of last October's massacre. Nevertheless, I now have a target of about 9400-9800 on the DOW (probably the low end if the bounce is weak) before a liquidity driven rally gets the market back up toward 10,000 around the end of the year. Zeev