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

To: LTK007 who wrote (51876)	5/23/2000 11:20:00 PM
From: Zeev Hed	Read Replies (1) \| Respond to of 99985

LTK, if you look at the chart with the 20 month moving average, it seems that the time to buy is when the NAZ reaches that level (only in 1998 it stayed under for a short period). That was one main reason I had 2950 as a potential low (for last week). Yesterday mildly negative sentiment readings (tick-1276 and STTI at above 8 on the NAZ) persuaded me to move back in on the bounce, however, the failure to hold 3300 this afternoon, reversed that signal. The fact that the sentiment indicators where not eve as negative as yesterday force me to reexamine the 2950 postulated bottom. That mistake in judgement yesterday cost me a cool 5%, of course, it is better to be 5% down from last week than in a week or two see myself down 30%, so running for the hills and capital preservation forced me back to 80% cash. I still expect the 20 months line to hold, but maybe we should also wait , concurrently with that holding to see extreme readings in the Naz and NYSE ticks and STTI (ARMS). I'll wait for these signals before starting to recommit. By the way, I still expect us to come out of this with a strong summer rally going into election, but what I expect and what the market does, have from time to time differed (G). Zeev

To: LTK007 who wrote (51876)	5/24/2000 2:43:00 AM
From: westes	Read Replies (3) \| Respond to of 99985

Does anyone believe that this particular market's 200-day moving averages mean anything at all, other than something purely psychological? The entire move up was one huge asset bubble. All MAs derived from that bubble inherit the characteristics of that bubble. They are by definition the result of a speculation that is in the process of being wiped clean. I would frankly be extremely discouraged, and I would fear for the future health of this market, and our economy, if the 200 day MAs weren't sliced through like butter and long forgotten. They aren't the place we should be hoping for a healthy bottom. The rising bottom of the Oct 98 trendline would be a nice place to bottom. That's still an overvalued market, but I think it is a level of speculation that we can comfortably survive. Anything between 2800 and 2000 is probably a reasonable place. Anything below 2000 and I predict you will see a swarm of buyers descend on this market like locust on a fresh crop. Personally I don't think we stay anywhere near 2000 too long, if we even get there.