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

To: Jerry Olson who wrote (42507)	3/7/2000 5:48:00 PM
From: Teresa Lo	Read Replies (1) \| Respond to of 99985

Finally wrote a The Trader's Notes for March 8, 2000 We first began to write about a churning top late last year as the Dow Industrials and the S&P 500 treaded water, and the NASDAQ began its lone ascent unconfirmed by any of the major averages. It has been pointed out by many observers that the Dow Industrials has been trading inside a pattern known as the Broadening Top, which many see as the ominous sign that conditions similar to that of the 1929 top are present in today's market. We would like to point out a second possibility. With yesterday's break of the February lows, the Dow Industrial Index is still testing the October 1999 bottom on the weekly chart. If this week holds, we could take the lower boundary of the broaden top and call it a neckline on a huge head and shoulders pattern that could stretch for several more months into the future before a final resolution. For now, resistance on the Dow Industrials is lurking at the 20-week EMA at 10680 and the 50-week MA at 10830. The S&P 500 Index is in the process of testing the uptrend line established in late 1998 with resistance in the 1400 area. The NASDAQ 100 Index remains in an uptrend on the weekly chart, but big around numbers like 4,500 are good places to find sellers. Until last week's low of about 4,000 is broken, it is still in an uptrend, making weeks of higher highs and higher lows. The most mysterious major index is the CBOE Internet index, which tried to break out last fall, and has been consolidating ever since in a very tight flag pattern. Until the trading range is resolved, there is nothing to do here. We take a quick look at the divergence between the Dow Industrials and the Transports. Perhaps there has never been as great of a disparity between the two indices in modern times. While it is almost old fashioned to look at these two indices in the same chart, we still wonder about why this is so. While the Death of the Old Economy has been proclaimed, given that billions of dollars of merchandise purchased online needs to be transported to their buyers, one wonders why transportation companies are not doing better. They would surely be able to pass on the price of increased fuel costs without much trouble. Or is the economy much weaker than we are lead to believe, and this is the first sign of trouble? Perhaps the rally in bonds, producing lower yields, is telling us something? The Trader's Notes prepares the trader for the day ahead, providing observations on market sentiment, internals, support/resistance levels and key pivot points in the major market indices using the daily chart. Use of moving averages and the Average Directional Index (ADX) indicator helps to determine whether the market is trending up/down or chopping sideways. Using Japanese candlestick charting techniques, observation of market action around support and resistance assists in the analysis of supply and demand based on fundamental principles of classical technical analysis. The results set up "if-then" scenarios used by the trader during market hours. Technical analysis is not used as a tool to "predict" the future or to pick tops and bottoms. It is used to detect areas of trend change and emerging trends. In a trading range, traders generally look to buy at the low end of the range and to sell at the high end of the range ? or stay out all together. In a trending market, traders generally look to enter the market on every retracement until it enters a trading range and ends on a test. The goal is to buy every dip in an uptrend and sell every rally in a downtrend. The trend is your friend until the end when it bends! Charts specific to this post are linked to intelligentspeculator.com

To: Jerry Olson who wrote (42507)	3/7/2000 11:12:00 PM
From: Dwight E. Karlsen	Read Replies (2) \| Respond to of 99985

i've been saying all along..smokestack stocks...are stodgy and can't make the profits the techs can... as we slow they will get killed... ------ The profits that techs can...uh huh. Like AMZN, you mean? Or the fact that the majority of Nasdaq stocks are money-losing companies? And how about your WAVX? For the nine months ended 9/30/99, revenues rose 47% to $70 thousand. [Hey, wow! a cool $70 thou!] Net loss applicable to Common rose 74% to $18.9 million. Higher loss reflects an increase in personnel, consultants, trade shows, equipment and other related costs and a $1.5 million acquisition cost. Now let's look at P&G: "Per-share growth for the full fiscal year is expected to be about 7 percent, down from the 13 percent rise originally anticipated, P&G said." So add 7 percent to: Income available to common (ttm) $3.61B That's on sales of: Sales (ttm) $39.2B. As for WAVX, sure the upside to 70 thousand is going to be far easier to dramatically increase than P&G's $39.2B The bottom line is, you and the rest of the mania traders are simply jumping on the bandwagon of what the herd is doing. And there is nothing wrong with that. Just don't try to claim that the "smokestack stocks" can't make the profits that techs can, because that's hogwash.