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

To: Gersh Avery who wrote (32169)	10/6/2000 9:14:16 AM
From: donald sew	Read Replies (2) \| Respond to of 42787

OCT 6 INDEX UPDATE --------------------- There are 2 chart patterns I would like to mention. It appears that there is a TRIANGLE or RECTANGLE forming on the DOW and a RECTANGLE on the SPX. TRIANGLEs and RECTANGLEs normally take the direction of the trend, which is for now down. Going back to the summer sell-off in 1998, I was referring to these patterns as STAIR-STEPs to the downside. In 1998 there were 3 distinct STAIR-STEPs. The 1st and 2nd were RECTANGLEs and the third was a WEDGE/FLAG. SPX - The higher and lower trendlines(horizontal) of the RECTANGLE are are 1460 and 1425. If the SPX is able to get close to 1460 I would consider that a good place to short, although it may not get that high. DOW - If it is a TRIANGLE the Upper Trendline is around 10835-10840 for today, and the Lower Trendline is around 10700-10745, depending on where one draws that trendline. If the DOW is a RECTANGLE the upper trendline(horizontal) is around 10850, and the lower trendline(horizontal) is around 10625-10630. One thing that I have noticed in the past with rectangles is that after the rectangle has formed for awhile, a spike/pop above the upper trendline is commonly the point where the strong selling resumes. This is somewhat contrarian since that spike/pop is commonly a minor/short-term higher high compared to the previous days(very short-term). DIVERGENCE INDICATOR: MID-TERM - no change in trend for the DOW/SPX/NAZ, still DOWN SHORT-TERM - slight positive divergence for NAZ, neutral for DOW/SPX. This implies that the NAZ should continue up for the short-term, and flip-of-the-coin for the DOW/SPX or if the market is down the NAZ should not be as weak as the DOW/SPX.