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

To: Mike M who wrote (65752)	1/5/2001 5:52:11 PM
From: eichler	Read Replies (2) \| Respond to of 99985

Hi Mike, <so, why not now?> sorry to be so late with this response, but from my point of view, your perspective now that the week is over is far more interesting. I guess, in the least, you can probably see my concern at the time that there would be no instant nirvana. Sure, on the heels of a 300+ gain, things look pretty rosy. How 'bout now? Actually, I'll just argue against myself for you here and point out a couple of observations. As bad as the chart looks, today's move completes a 62% (roughly - I just superimpose the fib line tool on IQ Charts so I don't bother with exact calculations these days) retracement from this weeks low to this weeks high. A very interesting spot for a rest if you ask me. Enough to give TA hope and also enough to shake out some more. Must be somewhat unsettling to be holding long over this weekend after today's action, no? Another curiosity to point out is just the look of the daily chart during the period 9/1-1/3. Lining up the Fib tool from high to low, I am struck by the basic beauty of how the double top 10/20, 11/6 represent the 62% retrace back up. The 12/11 top coincidentally lines up with the 38% retrace back up. The 50% retrace is the top of 11/27. Amazing that with the approximate distance from top to bottom, it just lines up that way. Another lower low from here (if not too low) would not alter the picture much either. I would say the answer to "why now" would be "because it looks right". Ha! Ridiculous! Maybe, maybe not. Strange how as you get a bigger picture of the chart, bit by bit, things eventually line up. May mean something, may mean nothing - especially if we eat tank-a-roni next week. Right now, I am leaning towards we have bottomed, or are close to a bottom (Intermdiate Term only- so no biting, bears!) to be followed with a REAL rally that really breaks the downtrend line and attacks the Fib retracements back up: 38% -3028, 50% - 3208, 62% (do I dare be so bold as to even put this one in...it seems so far away...) - 3480-3535. Of course, on the weekly chart from the spring highs, targets are much higher. If we are lucky enough to get a rally now, it is a bear-market rally. The market will tell us when it begins, the market will tell us when we get there. As the fundamental factors responsible for the market's woes will not be disappearing anytime soon (overvaluations, contracting economy, soaring energy costs, earnings worries, etc) I believe the more conservative targets are more logical. My final argument against myself is "Don't fight the fed", as has been mentioned numerously. The fact remains that the fed made a move and is likely to make more moves which help the market (I'm sure not intentionally-gg). I really don't care that it takes 6 months, blah, blah. The future 6 months is not trading the market now. People are trading the market now. People with thoughts and emotions. People are forever forward-looking and so is the market. The perceptions and emotions are enough in themselves to change the trend now, rather than 6 months from now. As an aside sort of contrary indicator, I have noticed much flip-flopping in opinion with even good traders, market watchers. Rydex numbers one day showing very bullish, the next day very bearish. Again and again. Everyone is getting fooled left and right. Perhaps a clue that things (downtrend - on daily chart) may be changing. Now that I have already stolen your best arguments against my questioning....what do have to say now! GGG (kidding) Actually, I would be interested in your take now that the week is over and also if you would elaborate on how you see the inverted yield curve and it's effect on the market going forward. Regards, Eichler <we were within spitting distance of the bottom of the NAZ Bull channel.> And we are again. ggg