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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA -- Ignore unavailable to you. Want to Upgrade?

To: J.T. who wrote (913)	10/19/1999 2:28:00 AM
From: J.T.	Read Replies (3) \| Respond to of 19219

AND NOW FOR ... THE BOUNCE While we did get this last sell-off in the DOW that I was looking for, it nevertheless only tested intraday lows at DOW 9,980 and could not pierce thru DOW 9,976. Ideally, I would have wanted capitulation selling to 9,850 intraday low but this was not meant to be. It was C, JPM and AXP that contained DOW from capitulating and in fact was the reason for the strong buying into the bell.. There are two ways of looking at this action: One is that it was not a clean wash-out play via the DOW and no serious selling commenced as witnessed by the TRIN closing at an overbought TRIN .63. This would then lead us to a final conclusion of panic selling in the markets tomorrow a.m. to make it "a clean wash-out". However, we can explain this TRIN non-confirmation away since this indicator is all alone and usually needs other short term indicators to back up TRIN reliability. This is not happening as VIX, RSI and put/call ratios to name a few are still in oversold territory. Longer term, Breadth is still a horror show and this will bite the bulls in the @ss as the show progresses. The second and more bullish way of looking at this is that this was the third test of DOW 9,976 and it held firm support and bounced solidly after the last test. This NDX was on both sides of this NDX 2,328 test I called for and once we hit NDX 2,300 intraday low area support we bounced real hard to confirm DOW. BKX also has again done its about face back northbound. This BKX alone has been the best indicator for me to call short term market direction of late. I have sided with the Bullish later view for this short term bounce I have called for last Friday. This CPI # will obviously make a hero out of anybody on the right side of the market prognostication... up or down. So here goes the scenarios: 1)Tomorrow is CPI benign and we rally hard taking DOW to this DOW 10,310 level on its way to potentially DOW 10,480 area sometime on Weds. before settling down around DOW 10,380 Weds. close. SPX 1,294 is within reach in next two days intraday before settling back to SPX 1,280. 2)CPI is mildly inflationary (core CPI .03 to .04) in which case we get morning sell-off panic selling out of blocks to this DOW 9,770 to DOW 9,850 target and get this afternoon bounce that can be played at least into late Weds. 3)CPI Core is .05 or worse and shows deep-seeded inflation fears in which case DOW could crash 500 + points minimum. I view this as lowest probability, but certainly not impossible. I think regardless some sort of bottom will be put in tomorrow if it was not already put in today. I have bet that the bottom was put in today. Best Regards, J.T.