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

To: pater tenebrarum who wrote (32293)	11/4/1999 8:15:00 PM
From: Robert Rose	Read Replies (3) \| Respond to of 99985

Heinz, this has been a good day on this thread. And yours is another good post. <Robert, yes, i believe this is a blow-off. i haven't said 'top'. not yet, anyway<ggg>. > So you would define a blowoff as a parabolic rise and fall on rising and then falling volume? The dot's behavior in 4/99 being a classic example? < based on the violence of the move and the extremely high volume that goes with it. > Volume certainly has been impressive lately, hasn't it? <another characteristic that is evident is that it is the most speculative and overvalued sectors that are driving the bulk of this move. > I would just like to add a note of 'caution' here regarding fundamentals. The b2b sector is predicted to grow to $1.3 TRILLION by 2002 (or 2003). Can you imagine how large a market cap that kind of market segment can support?? A HECK of a lot larger than the the b2b sector's current valuation! In fact, these sorts of economics are probably what are propping up some of these more speculative sectors during periods of market weakness. <there are so many stocks that have simply gone parabolic in this latest advance in spite of being at valuation extremes never before seen in the history of speculating man (and i mean NEVER)> Dutch tulips in the early 1640s were valued as high as $1,000 a piece in today's dollars, UNADJUSTED for inflation. Adjusted for inflation, I would guess that those bulbs would today be worth hundreds of thousands of dollars a piece. Heck, that makes even a truckload of scmr wallpaper look like a bargain. <g> < when, and at what level the blow-off will top out i cannot say. in the course of the move there may well be pullbacks that look like the top, but are actually not it. they should be sharp, swift, and be quickly left behind. the truth is that the top could be in tomorrow, or it could be in in three months time...that's really impossible to say.> You should write suspense novels. You make it all sound so exciting! <g> < i have written a post a few months ago about the possible characteristics of the TOP...i'll see if i can find it, otherwise i'll post my views on that anew. > I would be very interested. Regards, Rob

To: pater tenebrarum who wrote (32293)	11/4/1999 9:12:00 PM
From: bobby beara	Read Replies (1) \| Respond to of 99985

Heinz, i believe we are a a point were the pedal hits the metal, whether this is a new uptrend or a bear market rally. all based on 9 day rsi 30 oversold 70 overbought: bonds short term very overbought xau short term very oversold ndx/spx short term overbought ndx/comp sitting around the top of rising channel from january, and the candles over the last three days look flaky and you have what look like terminal moves outside channels in many of the specs and i'm sure all that ndx short interest built up at the october low is kaput. today .49 p/c ratio another equity only p/c ratio under .33. McCllellan Oscillator gave minor change reading today - means major move withing 1-4 trading days - also overbought - question is initiation spike or trading range top. If initiation spike we should get a minor sell-off. bb

To: pater tenebrarum who wrote (32293)	11/5/1999 12:54:00 AM
From: Robert Rose	Read Replies (2) \| Respond to of 99985

biz.yahoo.com

To: pater tenebrarum who wrote (32293)	11/5/1999 6:20:00 AM
From: donald sew	Respond to of 99985

Heinz, With all the excitement of NAZ 3000, most are losing sight that the overall market is not totally out of the woods yet. Since only 5 stocks make up about 40% of the NAZ, it is hard for me to say that it is a good indicator of the overall market of several thousand stocks. Of the 3 major indicies I now feel that the NAZ is the poorest representation of the 3, especially since the DOW now includes 4 new components, 3 of which is more focused on the HiTECH area. Of the 3 the SPX best represents the overall market, but what I prefer doing is averaging the 3 together to get a better picture of what the overall big caps are doing. A very simple way to do it, although not the most accurate is to just take the moving average of the 3(overly simplistic but just an example). Since the highs of this summer, from an averaging perspective, we are now still below the highs and if the market does not continue up from here it would be producing a LOWER HIGH. It also appears that SECTOR ROTATION is still alive and well, so if the NAZ does continue up it would probably be at the expense of some DOW/SPX SECTORs. If that is the case I will still have support for an intermediate uptrend in the bigger trading range. Although the market internals have improve somewhat, especially the NEW HIGHs/LOWs are not confirming any distinct longer-term trend at this time. One could even argue that it is simply pausing in an bear trend, since it is still far from the levels we have seen in the past during good bull trends. In the past good bull trends had NEW HIGHs consistently above 200 with spikes to 400, while the NEW LOWs were consistently below 40. As for timing issues, the end-of-month rally should now be over and statistically we should be heading into one of the the 2 weaker periods of the month. The 2 weaker periods in the month are the period after the end-of-month rally and the period after expiration. So now a good test of the strength of this rally is coming. If the forthcoming pullback is weak/slow, I would interpret that as a sign of strength. I feel that too many only look at the overall in 2 trends, that of a UPTREND and DOWNTREND. Since MARCH I have been calling for a TRADING RANGE TREND, which has been the case. Even with the recent downtrend in the SPX/DOW, if averaged with the NAZ, such may only still be within the parameters of a TRADING RANGE TREND. Keep in mind that I was reluctant from getting overly bearish at that time also. My position is that until we firmly break out of this TRADING RANGE TREND on an averaging perspective, I will consider this TRADING RANGE TREND as a possible TOPPING PROCESS for a bear market which I also discussed back in MARCH. What I need to see as evidence that this TRADING RANGE TREND is over is: 1) SPX and DOW to set NEW HIGHS 2) NEW HIGHs to consistently be near 200 and NEW LOWs below 40-50 3) On strong up days the ADVANCES to exceed the DECLINERS with 3:1 to 5:1 ratios, not 1.something:1 While most are concentrating on the strength of the HiTECHs, where are the sectors of weakness for the forthcoming pullback. MAYBE the TRANSPORTs and UTILITIES if news permitting. seeya Seeya