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

To: john rieck who wrote (27181)	9/25/1999 7:30:00 AM
From: donald sew	Read Replies (1) \| Respond to of 99985

John, >>>> it appears they(INTERNET) bottomed on 8/4 intraday (remember when YHOO hit 111?) and have been steadily rising since. the big drop yesterday was laughed off by netland. are they once again market leaders and saying this selloff is no big deal OR is it more like the band that played on while the Titanic went down? <<<< I feel that what we are seeing with the INTERNET stocks is just another example of SECTOR ROTATION. As I have mentioned, I feel that this extreme type of SECTOR ROTATION is an ANOMOLY, and anomolies need to be corrected. The first strong example of this EXTREME SECTOR ROTATION was in APRIL when the DOW ran from 10100 to 11000+ while the NAZ corrected about 10%. Then the SOX started taking off in late JULY followed by the NAZ, while the SPX was corecting and the DOW was remainly in a range. Now, while the the overall market is correcting the NETS are holding. So, as long as this type of EXTREME SECTOR ROTATION is still around I feel that further correction is required. Also, it is a very common belief that corrections are over when there is FEAR IN THE STREETs. Although there is some fear, the market was buying NETS yesterday, so the fear is not that great yet. Heres what I would also watch for the INTERNETs. The NETs have rebound about 54% of its correction from the all-time highs. The 62% FIBINOCCI REBOUND level is around 680. If it was to break 680 to the upside, that would be the first clue/confirmation that it can go higher and the that the bottom is in. Until that happens, my position is that it is just sector rotation and it should follow the rest of the market to the downside if this correction continues. I also want to add. Lets say that the market rebounds significantly, but the EXTREME SECTOR ROTATION still exists - then I feel that we will get another correction and another and another until one of the corrections is large enough to eliminate the anomoly of SECTOR ROTATION. Simply put - when something is abnormal, such abnormality needs to be fixed so normality can return. Since I love CANDLESTICKs(since they are so poetic), I just wanted to mention that the 3-CROWS which was also a clue, and came a bit earlier than the significant change in the NEW HIGHs/LOWs. seeya