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Strategies & Market Trends : Stock Attack -- A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Haim R. Branisteanu who wrote (23502)	5/24/2000 7:02:00 PM
From: HammerHead	Respond to of 42787

I watched CSCO to guard at $50, when it showed the support and run north I bet the money (QQQ) on PNTR approval and tomorrow's GDP. But it's the volume and big jump that surprise me. I don't think this rally will last long. Prepare to shorting again on Friday, FOMC is coming soon. AG might be upset we got big rally today.<g>

To: Haim R. Branisteanu who wrote (23502)	5/24/2000 7:02:00 PM
From: donald sew	Read Replies (3) \| Respond to of 42787

MAY 24 INDEX UPDATE --------------------- Short-term technical readings: DOW - lower midrange SPX - lower midrange OEX - lower midrange NAZ - lower midrange NDX - lower midrange VIX - 27.64, Borderline oversold(inverse to market) 5-DAY TRIN - 5.64 CBOE PUT:CALL RATIO - .50 The response to my CLASS 1 BUY signals was timely to early, so that implies the the forthcoming rally should be normal to strong. Im not going to put too much into it though. The minimum requirement has already been fulfilled. There was strong volume today especially in the NAZ so that implies that this rally should still continue. However I want to mention that HIGH VOLUME on the sell side never occured, implying that there was no capitulation on the SELL SIDE based on volume. I realise that it takes time for the market internals, especially the NEW HIGHs/LOWs to catch up, but right now the market internals are still poor. Some are saying that the NEW LOWs are peaking. If I recall correctly, the NEW LOWS in SEPT/OCT 1998 got as high as 1000+ for the NYSE. The NYSE NEW LOWs closed today at 127, and the NAZ NEW LOWS closed at 374. It may be a short-term peak, but doubt that those are long-term peaks for the NEW LOWs. If the market internals do not show some significant improvement over the next few days, then I will suspect that this rally does not have legs My short-term technicals for the overall market is already in the LOWER MIDRANGE. Im actually surprised that it rebounded that high. To put it into perspective - if the market continues straight up, I would get OVERBOUGHT readings in about 2 days and CLASS SELL signals in about 3 days. As mentioned in the past, when my short-term technicals get to the midrange, its a flip-of-a-coin concerning direction of the market. The midrange is the period when the market is most susceptible to news/fundamentals. While in the midrange, if news comes out which influence is opposite to the immediate direction of the market, the market could reverse right on the spot. To explain further, I have noticed that bad news is not so strong of a negative influence on the market when my short-term technicals are in the oversold/CLASS BUY territory, and good news is not that much of a positive influence when the readings are overbought/CLASS sell. Not too long ago we had a poor economic(it wasnt awful) report but the market still moved up - my short-term technicals were in the oversold region at that time. So if the economic report tomorrow is negative, we could see the market reverse right on the spot. What is really interesting is that my short-term technicals on the VIX is already near the OVERSOLD REGION and is only 1-2 days away from a CLASS BUY(INVERSE TO MARKET). I have noticed that one of my most reliable reversal signal has been my CLASS SIGNALS on the VIX. In the past the VIX CLASS SIGNALs always had some sort of accuracy but since the beginning of the year I started noticing improvement in its accuracy, and since MAR it hasnt missed once, to the day. I am suspecting that in a downtrend or flat period my VIX CLASS SIGNALs gains accuracy. Since I could get a CLASS BUY SIGNAL(inverse to market) in 1-2 days, this rally may only last until FRI/TUE. Please keep in mind that over the recent past, alot of technical damage was done to the NAZ and some to the SPX, and again this was very recent like yesterday. Im not sure it would be the wisest thing to become overly bullish if we get a a few good days of a rally. I prefer to keep it as simple as possible and if this rally produces a LOWER HIGH, then the liklihood is that the current DOWNTREND is still intact. To produce HIGHER HIGHS the NAZ would have to get above 3730 and the SPX above 1470 during this current short-term uptrend. That's a pretty big chore in light of the current market environment and since its prior to the FOMC meeting in JUNE. For discussion, lets say that the NAZ/SPX produces LOWER HIGHS, and the forth coming short-term pullback produces HIGHER LOWs. That would imply that some sort of chart formation like a TRIANGLE/WEDGE/FLAG/PENNANT is developing - unfortunately most of the chart formations would still take a negative bias since they normally take the direction of the trend. The exceptions would be a declining wedge or declining flag. So even if the forthcoming short-term pullback produces a HIGHER LOW, the chances are better that it would still have a negative bias and the downtrend remains intact. So the NAZ/SPX needs to produce HIGHER HIGHs during this current short-term upside, which could only last a few more days per my short-term technicals. That's a BIG CHORE. Im not saying that it cant be done, but the chances are against it. Unless the NAZ/SPX can break above 3730/1470 respectively, I am more inclined that this current short-term uptrend should be sold. The NAZ produced a LOWER LOW by 9.6%. Such was based on the previous low of 5/10 at 3367. It is statistically viable that with declines of over 7% the probability is in favor of a RETEST. It is not 100%, nothing is 100% in the market, but its significantly better than a 50/50 chance. For the mid/longer-term view, I still do not see alot of fear in the market. There's that old saying - THE MARKET CLIMBs THAT WALL of WORRY. With the CBOE PUT:CALL at .5 and the VIX only at 27.64, there is really no strong evidence of WORRY. The market was still buying CALLs at a good pace - sorry but that is not normally the pattern for determining an important bottom. The only significant positive I really saw was the HIGH VOLUME for todays rally, otherwise the negatives still out weighs the positives. Im more inclined to say that this short-term rally should continue a few more days, but I would not be surprised to see ZIG-ZAGs as early as tomorrow. If we dont see a significant rally tomorrow I would also take such as a significant hint that this short-term rally doesnt have legs. I would take that position since my short-term technicals are hinting that this short-term rally wont last long so the NAZ/SPX would need to set HIGHER HIGHS very fast to negate my short-term technicals. Do I sound a little bearish. Just trying to be objective. seeya