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

To: Les H who wrote (59812)	10/3/2000 8:23:51 PM
From: Saulamanca	Read Replies (1) \| Respond to of 99985

The Paragon Traders' Update – Oct 1, 2000 Sellers Remain in Control The sellers remained in control last week as the every rally in the December S&Ps served as a new opportunity to short. The week started with the S&Ps at 1468 following a massive short covering rally on Friday Sept 22. The market used the first three days of the week to retest this Sept 22 low at 1438. Wednesday’s low was exactly 1438 providing a successful retest and another short covering rally. This rally was even more violent than the first as the S&Ps moved over 40 points higher in just one trading session. Just like the previous short covering rally the sellers used the higher prices as an opportunity to short the market again driving it lower. The week closed with the December S&Ps at 1453.70, down 22.30 for the day and 14.80 for the week. It is clear the sellers remain in control. The market now has two distinct zones to trade against (1480-1485 and 1435-1440). We will continue to trade the market only from the short side until the bulls can prove they have stabilized the market. Market Outlook Where does the market go from here? The market has now found major support at the 1438 level twice in the last six trading sessions. A break of this level will trigger a massive amount of sell stops and increase the bear’s hold on the market. The sellers will also remain in control until the S&Ps can close above 1476. A close above 1476 would be the first sign the market has stabilized and produce renewed interest from the long side. Until then we will continue to only trade this market from the short side. Remember how ultra compressed the market was just a few months ago. Even though the S&Ps have moved over 100 points below the Sept 1 high of 1556.50 a compressed market such as we had often produces a major trend. Therefore, we still believe it is prudent to respect the downside action. We invite you to join us on our daily advisory service for all the details. Have a great week. Past performance is not indicative of future results. www.paragonfutures.com marketweb.com