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

To: HairBall who wrote (37083)	1/9/2000 2:33:00 PM
From: Lee Lichterman III	Read Replies (1) \| Respond to of 99985

Understand your point completely but you, I , Don, bobby etc can all look at the same chart and unless there is a signal attached to it showing a buy or sell, we could all come up with different interpretations. For example, a chart sitting at resistance with a long white candle. Is the long candle a bullish sign that it is about to blast through , or is it an exhaustion candle showing the resitance line will hold and we should short? Look at CA's weekly chart. Long black candle falling to the bottom of a bearish wedge. Pretty bearish looking yet it stopped right at the support line and has a few more weeks to play out the wedge in which case the stock could rally sharply for a good scalp play. There are as many ways to view a chart as there are people and we all look for different things. Someone looking at a candle chart that uses bar charts will ignore the candle part of the chart and focus on the formation or the trendlines where as a candle charter will put added emphasis on the candle. Someone looking at someone elses charts full of lines might focus only on the support lines where as someone else may see a formation hiding in the restance and support lines in how they intersect. I don't think specific numbers have to be stated but I do think a simple explanation as to what one is looking at and focusing on is justified. SOmehting like it is sitting on resistance and I think resistnace will hold, or it will fail. Even a watch it close at this level. I am not only singling out those that post charts. I often see news items that are vague. Is an item bullish or bearish, was a reported economic report above or below expectations? If puts or calls are at a such and such level, is this an increase over a certain time period, a one day pop? I will just go back to my cave I guess but thought that a clarification would be nice on some things. After mulling a few things over and cleaning up my site as I made more room on my bulletin board which required my reading through numerous old posts, I did have a refocusing on some issues that were discussed a lot earlier before the drop and bounce. The Fed still has a large number of repos coming due at the end of this month and into the first week of February. This should bias the market down near the end of the month. As someone here stated I believe, there was forced institutional buying as funds HAD to invest first of month cash. FOMC meeting is about the same time frame as the last of the Repos will be expiring. This could cloud the picture as a drop in liquidity and rate jitters will both be playing on the market at the same time clouding which is the real motivation. We could be witnessing an attempt to prop things up temporarily knowing that it will be harder to do so as liquidity is drained later this month. Also tax loss selling is over and many of the issues that were sold were bargains as fa as value were concerned. Buying back of these issues may be occuring since there is less risk in these low PE stocks in an increasing rate environment compared to the high flyers. This would broaden out the market only temporarily and make the A/D better. For this reason, I think that despite what ever happens short term, we are indeed heading lower late this month and the beginning of February. LAck of liquidity, the buying back of shares after 30 days of the new year will all contribute to the thinning back out ofthe leaders and the remaining money will attempt to stay in the already over priced prior leaders as they try to prop up the indexes. The problem will be they are trying to do so in a hostile rate environment. As the PE ratios of these few stocks soars to ever higher valuations and the interest rates go up in unison, a berakingpoint will be reached with dramatic consequences. I still beleive however that I side with heinz in that the end result will be recession and not rampant inflation. As the market loses it's footing, all the houses mortgaged to the hilt using stock options as the down payment capitol will make banks experience severe pain as well as the credit card non collectables. Business will be good across the economy but financial tightening and pain in the bank world will bring the market back to more coherant levels eventually. Good Luck, Lee