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

To: Benkea who wrote (60636)	10/15/2000 2:27:17 AM
From: John Madarasz	Read Replies (2) \| Respond to of 99985

Interesting comments here on foreign money propping the market... "Looking at the currency chart down the page, it appears that investments from the entire world are cascading into the United States equities and fixed income securities as fear of a Mid East war escalates. " home.att.net Have no fear <gg>, Fed still pumping away... Adjusted Monetary Base stls.frb.org Open Market Operations: app.ny.frb.org Regards, John

To: Benkea who wrote (60636)	10/15/2000 12:55:52 PM
From: KymarFye	Read Replies (1) \| Respond to of 99985

"Be careful with the semis." Agree that many charts in the group look disgusting, and that caution on the possible tech bottom is warranted, but I question the validity of securitytrader.com's charting methodology (http://www.securitytrader.com/charts/chart.asp?availability=... ). I'm not saying that all sec-trader's calls are useless, but it just doesn't make much sense to me to draw a symmetrical triangle and measuring implication without reference to volume patterns. If aggregate component volume for the SOX were available, I suspect it would show 1) increasing or at least equivalent volume on the right side of the triangle (it's supposed to decline) and 2) very high volume on the breakdown--which, at least according to Magee and Edwards, has the counterintuitive effect of increasing the likelihood of a reversal. Also, using a semi-log chart and fudging a bit can help make misses on a pattern look "good enough for internet work." At the very least, I'd want to see the same or similar patterns within component stocks and comparable indices. If you open up the hood on the SOX, underneath you'll find well-known horror shows like MOT and INTC, a few sound-looking recoveries from perhaps unjustified sympathy moves, a few minor corrections within intact uptrends. XLNX seems to be making a model recovery after being savaged (back over 200-day). LLTC hardly looks bruised. RMBS may be buyable on weakness. Among stocks related to the group but not within the SOX, you'll find everything from breakdowns verging on Internet proportions (RFMD, TQNT) to what looks like good business as usual (VTSS), to XLNX-like or better snapbacks (PMCS). So, to me, the jury's still out on the sector, and may have to stay there for a good while. Semis may be in too much turmoil to lead, and too variegated to be judged in general terms (or effectively through the SOX), but they also look like they offer plenty of opportunity (and danger) both long and short, and in all time frames.