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

To: Ed Pakstas who wrote (28993)	10/10/1999 12:43:00 PM
From: Lee Lichterman III	Read Replies (1) \| Respond to of 99985

OK, I just read 197 posts and it will take me a while to digest all this but my first reaction to various posts... Bobby regarding manipulation, is it coincidence that the OEX max pain point just magically seems to work. Note my post a couple weeks ago when we were down around 660 OEX and I saw the max pain at 692 and stated it was still very early to put a lot of weight in it?? Where are we now? On this same note, I am worried that even though Don and I may have negated signals, and I know that many of my charts are turning bullish or are at least very close to becoming so depending on how much they pull back etc in this short cycle that it may all be due to expiration. There were a lot of puts out there for this month and the huge number of calls that were out there were a lot higher than where we are now so they are non players in the equation. What could be greater than to have a rally as people are rolling out contracts to November with the emphasis on calls since we are "rallying " off the lows then dump it after expiration. As for the P&F indicators which I do follow and have some faith in. I see a lot of posts about how they made a fantastic call on last years low. Please don't leave out all the false reversals as the market did mini reverses then plunged down to even lower lows. I seem to remember very clearly the P&F thread dogging us saying we were idiots here for not going full hog long before the second shoe dropped and the market plunged twice as low last August. I won't forget because I made a mental note to let the NYSEBP give a double signal before believing it. As I went through my charts yesterday, I saw a LOT of stocks screaming buy but all of them also had wait for the short term on them. It seems all the short term cycles are over bought and should be allowed to retrace. Now the problem I have is the others that had these same patterns last weekend fell like rocks this week during thier "retraces". I am having trouble viewing the hardware makers as bullish if XRX and IBM are already admitting that revenues are slowing due to Y2K lockdowns in spending by corporations. I heard the same thing in many of the software makers a couple months ago and posted so here then. The bulls are saying we are going to rally on earnings but we now have two sectors stating that this quarter will be good but there will be nothing next quarter. If the stock market is 6-9 months forward looking, then wouldn't the next quarter be in that time frame also. Anyone look at a chart of XRX for last week <GGG> I have seen a few different companies report good earnings already and then drop. GE bounced back up but this pattern of selling on the news is usually associated with pre-earnings rallys and considering that we are both running to earnings and coming off of recent lows, I don't find this very bullish. Also note that Quantum warned after the close Friday. I am still seeing the best sectors rallying right now to be the ones that were the most "abused" for the last few months as bobby stated but I don't find this a bullish sign, instead it may just be another set of dead cat bounces in this grind down. Seems in my experience in the markets, in a bullish market a bottom is reached and followed by a consolidation period or a double bottom then an orderly rise up. Bearish markets have reactionary bounces with huge gapping up moves and large white candles. The often stated fierce bear rallies noted in all TA manuals. One look at many of these rallies and I know which one of the scenarios it resembles to me. Now all that said, I am sitting closer to the bullish side for now but not by much. I see very few short plays despite my feeling we needa s hort term pullback but I do see a lot of long plays to buy on the dip I expect. Still I am on pins and needles as I wan't to see the maket after expiration so I can see what the big money does after they don't have to worry about settling accounts. There has been much talk about the Advance decline and I have been mulling over a possible explanation for a while now and want to throw this out for discussion and it actually favors the bulls. The advance decline line has been falling despite the rising indexes as we all know. With all the richest men under age forty lists in fortune magazine etc it suddenly occured to me they all got that way from IPOs. Is the A/D really indicitive of the market as a whole or is it only showing that crud wanna be corporations are rushing to have IPOs in the hope that the CEOs can get rich quick then rush out to start some other scam outfit and do another IPO onand on. If so, the huge number of IPOs that come out of the gate then drop into oblivion would skew the A/D to the downside as only a small percentage of them are actually true growth prospects. If we have really had more IPOs than any other time as many have posted here, then these must have some affect on the A/D. I will leave it to others to shoot holes in my theory although I wonder how many of these are not pink sheet or BB stocks and are actually on the NYSE, NASDAQ etc. In other words, a new paradigm as the emporor is not wearing any cloths but maybe it is hot out or the laundry wouldn't take a check <g> Good Luck, Lee PS - I have been working weird hours and shifts and though todfay is mostly questions and thoughts, I hope to get a better look at my charts today and have some answers later.