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

To: pater tenebrarum who wrote (51696)	5/22/2000 8:08:00 PM
From: Les H	Respond to of 99985

Interesting Potential Three Gap Play WHAT TO EXPECT NOW. May 22, 2000 Timer Digest (203) 629-3503 has us ranked The Ord Oracle #3 in performance for 1999. There is a potential "Three Gap Play" in the making on the June S&P's. The First gap formed between May 16th to 17th. The second gap formed between May 18th to 19th. The third gap is still forth coming and should mark the end of the down move. When the first two gaps are left open (which is what we have) than usually you can expect a third gap which is called an "Exhaustion Gap" and that gap marks the end of the down move. The third and final gap may test the April 14 low near the 1350 area. The April 14 low had volume of 1.265 billion shares. If this potential test of the April 14 low were on volume less than 1.265 billion shares, then more confirmation for a bottom would be obtained. The "5 day ARMS" on the NYSE closed today at "5.80". Readings near "6.00" and above appear near lows. A potential buy signal may develop near the April 14 low at 1350 area. Once the third gap forms the market usually reverses quickly and rallies back up and "fills" the gaps ending with the first gap up near the 1470 level which will be our first upside target. On the sidelines waiting for this potential buy signal to develop. The NDX broke below the January 7 and 31 lows on increased volume on January 14. This condition implies the bigger trend is down in this index. Today the NDX broke below the previous low of April 17 on volume of 1.63 billion shares. The April 17 low had volume of 2.48 billions shares. A breaking of a previous low on lighter volume is bullish for the short-term. The "5 day ARMS" on the NDX closed at 7.05. Readings above 5.25 area bullish. It appears this index is also nearing a short-term low. If a buy signal is generated, we are only looking for a bounce in an on going downtrend. However this bounce could rally up to the 3700 area. We are looking for a third gap on a "Three Gap Play" also on this index. Our first upside target on the XAU is near the 70 level. marketweb.com