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

To: John Madarasz who wrote (33380)	11/13/1999 9:03:00 PM
From: Dwight E. Karlsen	Read Replies (1) \| Respond to of 99985

John and Don, I should state the time parameters I'm thinking of, per my previous post. I think there will be a top on Mon., then some kind of pullback Tues & Wed. Then options expirations will cause erratic fluctuations as option related positions begin to unwind. Then the week after expiry, selling will intensify, due to unwinding in earnest. Heinz has commented many times on the unwinding of delta-related hedging by MMs, generally following expirations. Sometimes we see the effect, sometimes it's not noticeable. This month however, there has been an incredibly sharp upward movement in stocks, so IMO the unwinding will be quite noticeable. Note that I'm not very knowledgeable in this area, but that's my take. So, it could be a combination of events that sets the ball rolling downhill: 1) "sell the fed news" (already priced in) 2) Profit taking (you can't pay off your house w/stock) 3) option-related position unwinding 4) Cycle top in, next cycle low Dec. 3-4th. 5) Classic hanging man stick on the Nasdaq on Friday. Furthermore, IMO the market has already had the better part of any "Santa rally", and has also priced in Y2K as a non-event. The reasons to buy are getting to scarce, while the reasons to sell are numerous, IMO. Of course, aliens from another galaxy may step up to the plate and buy 'net stocks all the way through April 2000. A lot of things could happen that nobody sees yet.