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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Chip McVickar who wrote (2741)	8/31/2000 12:13:43 AM
From: Dan Duchardt	Read Replies (1) \| Respond to of 33421

Chip, BTW, the dominant nas fork off 7/6 using the big spread that follows has a median line at 4065 on the day. A close below this median line suggests traders will see 3850 at some point soon. I probably didn't know what a fork was before seeing some of your messages posted on this thread, so I don't speak from a position of great experience or expertise, but on purely mathematical grounds I find it hard to accept the idea that 7/6 is the origin of the dominant fork for the Nas. First, 7/6 does not appear to me to be a trend reversal point. It appears to be just the last in a series of minor lows before the continuation of the uptrend between 5/24 and 7/17. As such, the numerical value of that low and the day on which it occurred seems to me to carry a lack of measurement precision or "noise". Second, 7/6 is very close in time to the prominent highs and lows defining the "big spread" (I assume you mean from 7/17 to 8/3), which means that it has a lot of leverage amplifying this noise, currently about 2:1. So if we say the origin has a measurement uncertainty of say 25 points, the current level of the median line is uncertain by 50 points. I do see the Nas climbing up the 7/6 median line the last several days, but I also see a fork originating on 5/24, the primary (lowest) Nas low since the record high, that has a median line with higher slope and far less leverage because of the greater distance away from the recent high-low spread. Neither the median line nor the lower tine of this fork has yet been tested. The lower tine is now around 3945 with the median up in the 4450 area, well above the July highs. The slope of the uptrend since the 8/3 low is much closer to the slope of this fork than the 7/6 fork. All of that to preface a question: What is your criteria for deciding which fork is dominant, and is that fork the only one that matters? Although the 5/24 fork seems to me to be more precisely defined, it has yet to be tested. It would take a mighty strong move to catch the median from here, though such moves have happened before (e.g. from 5/24-7/17), but I would think it would at least have a chance of catching the next pull back TIA Dan