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

To: donald sew who wrote (34199)	10/27/2000 12:19:27 AM
From: donald sew	Read Replies (4) \| Respond to of 42787

OCT 27 INDEX UPDATE --------------------------- DOW - extreme overbought, pending CLASS 1 SELL signal SPX - midrange OEX - midrange NAZ - midrange NDX - midrange VIX - midrange Other than the the DOW, the rest of the major indicies are in the midrange which I refer to as the FLIP-of-the-COIN territory. Its also interesting to note that prior to important announcements my short-term technicals commonly are in the midrange. So if the economic news is good the the rally should continue a bit more and if it is not good then selling should resume. Please be cautious in becoming overly bullish with 1-2 day strong rallies. Since the beginning of SEPT, the NAZ/NDX has had seven 1-2 day rallies which failed. Some are already believing that todays restest of the 3000 region on the NDX may be the MAIN BOTTOM. The problem I have calling for a major bottom now is that since 1996, when I first got into the market, all MAJOR BOTTOMs were made with the the 3 major indices(DOW/SPX/NAZ) in the extreme oversold region(CLASS BUYs) per my short-term technicals. There was not 1 exception; however it is also not statistically viable since we have not had 30 major bottoms since 1996. As of todays close the DOW is at a short-term high(pending CLASS 1 SELL) and the NAZ/NDX never got to CLASS BUY territory. If this is a MAJOR BOTTOM then it is out of character of the other major bottoms since 1996. Im not saying that the rally today cannot continue, just doubting that today was a MAJOR BOTTOM. It is quite obvious that we are getting extreme sector rotation again, with the recent selling in the NAZ/NDX to send the DOW higher. My position is that EXTREME SECTOR ROTATION is an anomoly to the market on a historical basis, and that ANOMOLIES eventually get corrected by corrections in the market. In the last 7 trading days, an ISLAND REVERSAL may have occured. Its not a perfect formation but does fulfill some of the criteria. First, there was a strong UP-GAP 6 days ago, followed by 4 days forming the ISLAND, then the strong DOWN-GAP on WED. The NDX is a better example since the ISLAND is clearer. If it is an ISLAND REVERSAL to the downside, my understanding is that may take a while to end its negative influence. stockcharts.com