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

To: dennis michael patterson who wrote (30315)	9/20/2000 7:42:25 AM
From: donald sew	Respond to of 42787

SEPT 20 INDEX UPDATE ---------------------- Just wanted to add some comments to the previous update. As already mentioned, Im not convinced that a bottom is yet set although the NAZ/NDX were up so strongly. Per my short-term technicals, the DOW is very oversold(strong CLASS 1 BUY) and the DOW did give a DOJI/SPINNING TOP yesterday which is a hint that a rally should start. If the DOW does not start to rally and close positive today that would be the first hint that the DOW may be NEGATING its CLASS 1 BUY signal. Im not saying that the DOW wont bounce, in fact Im expecting it to bounce, but if it doesnt that would be a strong negative for the market. What I will also be watching carefully is how the NAZ/NDX reacts if the DOW does bounce. If the DOW bounces and the NAZ/NDX starts to lag the DOW, and worse if it closes negative, I will consider that action as a negative for the overall market and a hint that this rally may not have legs. Lets see how fast the NDX can approach the 3850 resistance area from here. If there is little or no follow-thru today I would consider that as a lack of strength for this rally. Also watch the SOX, which has been a key in determining the strength or weakness in the NAZ/NDX. If the SOX starts to lag the NAZ/NDX, that could be a hint of weakness forthcoming. Im not one to make too much of the futures before the open since it can change quickly and often enough is a contrary indicator. However, the futures are down this morning which is surprising me a little. Keep in mind that the previous selloff was on the strong side, and with the strong rally in the NAZ/NDX, I would have subjectively expected a good level of optimism since it is still early in the rally. Its only 7:30 am, so we still may get the futures to go positive before the open, but for now Im not seeing the optimism that I expected. Again, I wont get too optimistic with yesterdays strong rally in the NAZ/NDX unless the DOW can bounce without the NAZ/NDX losing strength. In other words Im looking for broadbased follow-thru to yesterdays HiTECH rally for a sign of strength, otherwise I will consider a narrow rally as a lack of strength for this rally. If there is lack of strength to todays follow-thru, I will be starting to add SMALL short positions. Keep in mind that Im not expecting a downside reversal today, but Im 90% cash and will start building my short position if there is lack of strength. Just wanted to explain - if I wasnt 90% cash, I would wait longer to initiate short positions.