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

To: Les H who wrote (61357)	10/24/2000 3:03:47 PM
From: Saulamanca	Respond to of 99985

Put Your Dancing Shoes On In last week's report we talked about not coming to the short party late as the market was becoming deeply oversold. In addition, we stated the market might move below the previous 1339.50 pivot. Tuesday's opening decline to 1324.80 was the final panic the market needed to wash out any remaining longs and trap any bears looking for the kill on expiration week. The expiration massacre would occur on the upside as the market rallied nearly 100 points off the Tuesday low as the bears watched their October puts become worthless. This was exactly why we warned in last week's report to be very careful on the short side. We have seen this pattern numerous times as the market counter trend rallies late during expiration week only to resume the trend move the following week. The market is now at a key juncture. The key resistance area is 1425-1438 on the December S&P futures. In last week's report we stated as long as the December S&Ps do not close above 1435 the downtrend is in place. This is still the key pivot level. Even if the market is to move up through the 1438 pivot level we would anticipate it would first need to consolidate between 1380-1425. The wild card this week will once again be the December Crude contract. A close above 35.00 will send another shock wave of fear through the market pushing stock prices lower across the board. It is setting up to be a very interesting week. We hope you join us for our nightly Paragon Traders' Report update. Market Outlook Where does the market go from here? The market has now worked off its oversold condition and is back to the breakdown area of 1425-1438. If the market can close back above 1438 the bulls have survived and will regain control of this market. A failure at the pivot zone (1425-1438) will bring the bears back in full force creating another wave of selling. Watch the December Crude contract this week. A move above 35 a barrel will put significant pressure on the market. Furthermore, the US T-Bonds are again moving higher. The bond market is trying to tell us more trouble is on the horizon. As long as the T-Bonds stay above 100-00 keep your ear to the pavement. Have a great week trading. Past performance is not indicative of future results. www.paragontrd.com marketweb.com