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

To: Les H who wrote (42404)	3/6/2000 2:33:00 PM
From: Les H	Respond to of 99985

The equity-only put-call ratio remains on a sell signal, and breadth remains poor (except for the two big oversold rally days for the Dow). As a result, our indicators have not issued buy signals, although they're closer to it than they were last week. Our computer predictions for the equity-only ratio indicate that there is about a 75% chance of it turning to a buy signal, but we normally require 95% or higher for generation of a new signal. In addition, the oscillator got down below -400 late last week -- a condition which was the springboard for the oversold rally in the $SPX and Dow. However, it remains at -276 and won't issue a buy signal until it rises above -180. So it seems to us that the big-cap market ($OEX, $SPX, Dow) is still in some trouble (and even the NASDAQ is showing some cracks in the facade all of a sudden). I think it would be wise to wait for one or both of these reliable indicators to generate buy signals before adopting an intermediate term bullish stance on the big-cap market. optionstrategist.com

To: Les H who wrote (42404)	3/6/2000 6:15:00 PM
From: Monty Lenard	Respond to of 99985

Les here is interesting excerpt from Yamners weekly market letter that addresses this issue also. I especially like the part about 1999 MF inflows equals 2 days volume at current levels. "Money flows into or out of the stock market occur virtually only when shares are issued for the first time or redeemed for the last time by the issuer. In all other cases, each side matches the other side dollar for dollar. Although Americans are putting large amounts into equity mutual funds, it appears that they are also pulling cash out of individual stocks faster than they are putting it into mutual funds. If money is going into funds but being withdrawn out of the individual stocks, it is more like shifting money around from one custodian to another than a net inflow. Additionally, the amount of incoming funds into mutual funds is much too small to determine the market's direction. In 1999, investors invested $225 billion dollars into equity mutual funds. This enormous amount, when broken down, amounts to 2 trading days based on the current volume of the U.S. markets. That 'inflow' is a net of all funds; retirement funds represent a minority of that number, calculated by the ever-optimistic Merrill Lynch as less than 30%. Retirement money is not that big of a factor when calculating new investment." Subscribe Subscribe to our mailings: tdesk@yamner.com (place SUBSCRIBE in subject). Monty

To: Les H who wrote (42404)	3/6/2000 7:41:00 PM
From: Les H	Read Replies (1) \| Respond to of 99985

WHAT TO EXPECT NOW. March 6, 2000 ORD. The March S&P's hit a resistance area near the 1410 level on Friday. Friday the "5 day ARMS" hit 3.42, which is a bearish reading, and one of the lowest readings for the last 12 months. If the "5 day ARMS" stays near a reading of "4.00" for several days or weeks, then that would imply another significant decline is on the way. This condition happen from mid-November to late December of 99 where the "5 day ARMS" stayed mostly between 3.50 to 4.50, which in turn predicted an intermediate term decline (the decline that started from the January 3 high tell present). Therefore we will keep an eye on this indicator over the short term. The March S&P's retraced almost a 100% of the decline form the February 15 high, which is the previous swing point. This condition implies the market should head higher after the next pullback is complete. A gap formed between last Thursday's close to Friday's open that need to get filled before the market heads up again and to fill this gap the market would need to pull back to the 1380 area. We will look for a bullish signal to be generated near the 1380 later this week. Our upside target will be around the 1440 - 1450 level. The 1450 area is where a "Bearish Engulfing" pattern formed and "Bearish Engulfing" patterns are usually tested and once tested turn into a resistance area. We will be watching the 1380 area for bullish signals. The XAU index may head sideways to a little down for the next several weeks. The bigger picture on the XAU is a longer term bottom forming.