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

To: Lee Lichterman III who wrote (31938)	10/30/1999 8:38:00 PM
From: dennis michael patterson	Respond to of 99985

Favors: Oct 29, 1999 For the last two weeks it has been our position that the Dow saw a very important bottom on October 15. So far the Dow has rallied 761 points on a closing basis from that low. At the highs today the Dow was up 167 points. We closed up 109.20. The forecast we gave last Friday called for a short-term low by Monday or Tuesday of this week and then another rally into the next short-term high, due near Monday, November 1, plus or minus 1 day. The Dow so far reached a closing low of 10302 on Tuesday, October 26. We have since rallied 429 points to today's close of 10731.70. The Dow exceeded 10782 intraday today, so the Gann Weekly Chart has given a Buy Signal today. It is possible that the Gann Monthly Chart could turn up next week. There are only two Gann Charts which are more important than the Gann Weekly Chart: The Monthly Chart and the Quarterly Chart (we discussed the Quarterly Chart last week). The longer the time span covered; the stronger are its signals. So, a Monthly Chart is more important than a Weekly, and the Quarterly Chart is more important than a Monthly. For the Monthly Chart to turn up, the Dow must exceed the intraday high for the month of October. So far the intraday high this month was seen today on October 29. The 5-Day RSI on the Dow closed at 75.80 today. The RSI reaches overbought territory above 70, so today's reading is only a mildly overbought reading. The Dow once again closed back above its 200-Day Moving Average today, which is a short-term positive signal. The 10-Day Rate of Change is still rising with the Dow, which is short-term bullish. The Dow closed above its second Fibonacci Speedline today, which is bullish. This week we gave our subscribers a preliminary upside projection for the Dow calling for a rally up near 10810 plus or minus 92 points intraday. That projection calls for a minimum of 10718 intraday to a maximum of 10902 intraday. We are well into that projection at Friday's highs. The Dow will normally find very strong resistance to any rally up near or just above the top of its 21-Day 3 1/2% Exponential Trading Band. We rallied above the top of the band on an intraday basis today. The top was 10806 intraday. The top of the band on Monday should be near 10837 or so intraday. We would expect the Dow to find short-term resistance to any further rally Monday in that area, at least for the next few days. While we look for a brief correction early next week we remain bullish, and it remains our position that the Dow will ultimately see new all-time highs over the coming weeks and months.