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

To: Teresa Lo who wrote (26913)	9/24/1999 3:44:00 AM
From: Teresa Lo	Read Replies (2) \| Respond to of 99985

THE TRADER'S NOTES for Friday, September 24, 1999 Yesterday's Observations: Unease over the market's inability to rally turns into fear and manifests in selling. Perhaps the beginning of panic as volume increases to the downside. TV commentators sound alarmed after key support levels broken. Hopes turn to G7 meeting on Saturday in Washington to deal with the Dollar/Yen problem, restore stability and confidence. Today's Theme: Code Red on test of August low. All hands to battle stations. Situation critical. Set up similar to Black Friday before 1987 Crash. Needs to find a bottom on test of August low to save the day. S&P Futures/SPZ9: 1310 level breaks as expected after being tested three times over the past week. Next stop: test August low. 20EMA45= 1306, 20-Day EMA= 1342, 50-Day MA= 1359, S1= 1287, S2= 1250, R1= 1379, R2= 1403. S&P 500 Index/SPX: Test of August low pending on approach of neckline of head and shoulders top seen on daily chart. 20EMA65= 1309, 20-Day EMA= 1327, 50-Day MA= 1341, S1= 1267, S2= 1215, R1= 1338, R2= 1361. Market Internals: New 52-week NYSE Highs = 23; New Lows = 282. Continues to deteriorate. Dow Jones Industrial Average/INDU: Trading range decisively broken. Support is 9,500 area. Dow Theory non-confirmation since April 1999. 20EMA65= 10570, 20-Day EMA= 10814, 50-Day MA= 10924, S1= 10430, S2= 9547, R1= 11142, R2= 11365. NASDAQ 100 Index/NDX: Trades back into July high and breaks support. Watch for action at the 50-day MA. 20EMA65= 2481, 20-Day EMA= 2451, 50-Day MA= 2365, S1= 2413, S2= 2327, R1= 2539, R2= 2551. CBOE Internet Index/INX: Makes a new 20-day high but sellers take control at 480 resistance, producing a Dark Cloud Cover pattern on the daily chart. Still in a small triangle pattern. 20EMA65= 468, 20-Day EMA= 454, 50-Day MA= 445, S1= 417, S2= 336, R1= 490, R2= 580. EMA = Exponential Moving Average. MA = Simple Moving Average. S1 = Closest support on daily chart. S2 = Support below S1. R1 = Closest resistance on daily chart. R2 = Resistance above R1. The Trader's Notes prepares the trader for the day ahead, providing information on market sentiment, internals, support/resistance levels and key pivot points in the major market indices. Use of moving averages and the Average Directional Index (ADX) indicator helps to determine whether the market is trending up/down or chopping sideways. Using Japanese candlestick charting techniques, observation of market action around support and resistance assists in the analysis of supply and demand based on fundamental principles of classical technical analysis. The results set up "if-then" scenarios used by the trader during market hours. Technical analysis is not used as a tool to "predict" the future or to pick tops and bottoms. It is used to detect areas of trend change and emerging trends. In a trading range, traders generally look to buy at the low end of the range and to sell at the high end of the range ? or stay out all together. In a trending market, traders generally look to enter the market on every retracement until it enters a trading range and ends on a test. The goal is to buy every dip in an uptrend and sell every rally in a downtrend. The trend is your friend until the end when it bends! Charts specific to these comments have been posted to intelligentspeculator.com