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

To: Les H who wrote (34911)	12/8/1999 5:16:00 PM
From: Les H	Read Replies (2) \| Respond to of 99985

Momentum Is Fading for Stocks By Paul Cherney, S&P Market Analyst NEW YORK, Dec. 08 (Standard & Poor's) - High volume and only a fractional change in prices were the case for the NASDAQ in Wednesday's session. The NASDAQ is ripe for profit-taking. When a market has excessive volume and relatively little price change, that day's trading represents a balancing point between believers on the upside and investors/traders who are already satisified with the gains that have been made. The recent rocket-shot in the NASDAQ may have created a certain degree of caution among potential market participants. If they decide to observe from the sidelines, momentum players bailing out of positions could easily find themselves trying to sell into a thin crowd of reluctant buyers. Markets don't really fall because of an enormous number of sellers, markets fall due to a lack of willing buyers who can only be coaxed into the market by relative bargains (lower prices). The yellow flags of caution are flying. NYSE new 52-week lows are firmly planted in the danger zone, meaning that a "bad" headline would ignite some aggressive selling. From a psychological perspective, a "bad" headline is still needed to produce a sell-off/retracement because a bad headline creates an element of doubt which keeps potential buyers on the sidelines until they can't possibly ignore the short-term bargains created by a drop in prices. Wednesday's intraday retracement in the NASDAQ has established resistance in the 3610-3626 area. NASDAQ support is substantial in the 3575-3525 area. A break below 3507 would open risk for prints in the 3469-3430 area. The S&P 500 has immediate resistance 1417-1426. Immediate support is 1408-1400, then 1397-1386.