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

To: donald sew who wrote (40673)	2/18/2000 6:31:00 PM
From: pater tenebrarum	Read Replies (1) \| Respond to of 99985

Don, you can see the formation quite clearly in Dow stalwarts like GE, WMT, HD, MSFT...and some have already begun to look quite sick. looking at the BKX, i have done a wave count, which if correct portends a lot more downside to that index...it just entered a 3 of 3 down, which is usually the biggest and swiftest part of the decline. as for the Oct. lows, the Dow that was used in October, before the deletion of CHV, GT, UK & S which were replaced with MSFT, INTC, SBC and HD is already way below 10,000. of course i may be wrong with that assumption, but i think the market may be in a lot more trouble than is generally assumed. let us not forget that in the month of January, a whole slew of sentiment indicators reached all-time extremes. usually market peaks that follow such extremes are of an important nature. the whole psychological set-up of the market is ideal for a major setback. note that there is simply NO concern. everybody is mesmerized by the Nasdaq's run, to the extent that tech stocks have been declared immune to interest rates, oil prices, you name it, let us call it fundamentals in general. to that i can only say that it is utter bunk. i for one think that the inverted yield curve and the big declines in economically sensitive stocks portend a slowdown, perhaps even a recession. if so, the tech stocks will suffer greatly. the NAZ performs particularly badly during recessions. the fact that there are no worries in the market has been highlighted today by the stellar performance of most of the BB stocks i trade. it was as if nothing was happening in the rest of the market. that tells me that the wall of worry has quietly died. that said, i have seen the mania defy all sorts of Cassandra calls in the past, and it can be assumed that the administration will do whatever it thinks it takes to keep the market from tanking in view of the election. anyway,in the short term the INDU/TRAN/SPX SHOULD bounce here. if they do not, the market will be in real trouble... regards, hb