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

To: Techplayer who wrote (61029)	10/19/2000 11:18:21 PM
From: HairBall	Read Replies (2) \| Respond to of 99985

Techplayer: I don't know what the IBD follow through theory is, sorry. And, I am not an EWaver either. My stuff just tries to identify the trends or potential reversal of the trend. I just try to be on the right side of the moves or at least positions to not be hurt by them. I am looking for a retrace tomorrow, but I am not committed to that expectation with a daytrade. On more than one occasions this market has blasted off. It is not wise to step in front of the train unless you are darn sure. I usually am not darn sure until my real time multiple time frame technicals all line up. They were mixed into the close today. However, per the COMPX chart I posted this afternoon, I do think the COMPX is close to a pullback per the rising wedge it is trading in. If it breaks to the norm, that would mean at a minimum a retrace of a portion of the formation and at a maximum a continuation of the trend from which it originated. If the Sept 1st downtrend line is taken out tomorrow, not just breached that will negate the rising wedge and all bets are off for the retrace. As I type futures are up this evening...let's see what tomorrow brings. Regards, LG

To: Techplayer who wrote (61029)	10/20/2000 12:24:25 AM
From: John Madarasz	Read Replies (3) \| Respond to of 99985

TP... Today was indeed a "classic" follow through day on the COMPX... Although yesterdays decline on steep volume was not the greatest signal to have in the mix. According to O'Neil a follow through day on another index besides the COMP, a few days after today, will confirm the beginning of a new bull rally. This method gives false signals about 20% of the time, and is pretty easy to spot through prompt breakdowns on large volumes. He also goes on to say, most true follow throughs will usually show strong positive action on good volume either the day after the follow through (today) or several days after. Convincing power and strength are what you want to observe. Most importantly though I think he makes the point that markets discount news items and look ahead of the economy up to six months. Make decisions based on objective observations of when and how the general market indices finally change direction from their downward trend. In essence, filter out the noise<gg> The next few days should set the tone, according to O'Neil, and LG<gg> I think both are right in step. Regards, John Madarasz FWIW: Both the SPX and OEX confirmed with follow through days today as well, meeting all criteria, but the INDU rally, while still valid, has yet to follow through on greater volume.