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

To: HairBall who wrote (33881)	11/21/1999 3:39:00 AM
From: Compadre	Read Replies (1) \| Respond to of 99985

Hello LG, It has been an incredible run for the NDX as of late. My trading system was on buy mode for 13 days in a row. from 2573 till today for a total of 355 NDX points. Although my trading system is still giving a buy signal, I see signs that it may be toping out soon. The NAZ volume peaked last Wednesday with 147.7% of the average volume. It has dropped dramatically since then, to 124.6% the average volume. In the past I have noted that record volume peaks like this were always followed by a price peak with a significant pull back within 2 to three weeks. Similarly, the NYSE stocks volume peaked as well but earlier, on 11-4-99, with a whopping volume of 1.364 billion. That was 2 weeks and 2 days ago. And it was a whopping 165.9% of the average volume. That has to be the highest percentage above average that I have ever seen since I started paying attention to the stock market in 1993. Well, I know that you think that one single indicator is not meaningful. So I got you a second one to back it up. I Have used % D, a component of Stochastic to pin point market tops for a while now. I have a dozen % D lines set up with different parameters. Changing the period of % D by using a series of Fibonacci numbers. When all the % D lines line up at the upper end of the overbought range it is said to be a sell signal for me. On Friday, the %D values for the NDX were as follows: %D (3) = 97.7% %D (5) = 89.6% %D (8) = 93.1% %D (13) = 95.81% %D (21) = 96.3% %D (34) = 89.9% With these numbers, I would say that there will be a correction of this index within a week most likely to the 21 day EMA but it could stop at the 13 EMA instead. I will not initiate any action until I get a sell signal from my trading system. Regards, Jaime