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

To: Paul Shread who wrote (1091)	2/25/2001 5:58:17 PM
From: donald sew	Read Replies (2) \| Respond to of 52237

Paul, The rally that started FRIDAY definitely needs immediate follow-thru, with MON closing up, otherwise forget it. What is in favor of a rally now: 1) END-of-MONTH RALLY timeframe 2) STRONG OVERSOLD readings in many technical indicators 3) various cycles ending. My mid-term cycle closed either WED or FRI of last week, and others have cycles ending this coming week. Its a fair assumption that with the dramatic response to ANGEL's comment that GREENIE will cut this week, if it doesnt occur this week, we could see a retest of FRI's lows and possibly more. I was pondering what NANCY had mentioned about the NDX having difficulty breaking above the 2400 region. Assuming that FRI was the bottom and that the NDX can not break above 2400, that would mean that the NDX was unable to complete the common FIB 38% rebound. Not that it is for sure, but that could also imply that PHASE 2 is still not over and that the bottom of PHASE 2 could even be lower since that senerio would produce a LOWER HIGH, also implying that the downtrend is still intacted. Just want to add that although there has been alot of talk of the 3-PHASES of bear market,that doesnt mean that it will happen for sure; howerver on the other hand we should not ignore the possibility of a 3rd DOWN-PHASE. My guess is that if there is a 3rd PHASE the NDX should bottom in the 1500-1400 region, with worse case senerio in the 1100-1000 region. Some may say thats impossible, but 1500 is only about 400 points lower than FRI's lows, and if the RUT and SOX and BTK, which have held up better than the NDX, start to sell off with vigor, that 1400-1500 target may not be so crazy. Of course, no certainty of a PHASE 3. EDIT: Forgot to mention - the possibility of NEGATED CLASS 1 BUY signals still exists. The CLASS 1 buys arrived last WED with the buy-in on THUR, so the minimum requirement still has not yet been fulfilled.

To: Paul Shread who wrote (1091)	2/26/2001 4:33:01 AM
From: Michael Watkins	Read Replies (1) \| Respond to of 52237

Paul, First, breadth was negative on the COMPX (21-17) and volume was light You'll possibly need special Squint-O-Vision goggles for this one, but wanted to show some data from spring last year. ottographs.com As you can see, breadth was negative and volume lower in the case of the May 24 2000 swing low, yet a 1000 point rally ensued. I would argue that retests of an important low might frequently happen on lower volume, as I'm certain that some down moves end simply due to a drying up of selling (for whatever reason). At retests all players are being more cautious, knowing that outcomes are being decided. If players are cautious, then lower volumes would be expected, thus it doesn't surprise me to see lower volumes form part of the test/pattern. The second is more of a question: given that the SPX/OEX/COMPX/NDX only made new intraday lows by 2-5% or so, and closed back near the intraday lows from December/January, is this close enough to qualify as a retest? With the caveat that this rally could still fail before it ever takes out any meaningful levels to the upside, of course. I don't look for a fixed percentage, only that price moves very quickly - ideally the next day - back up into the prior trading range. I've seen many "double bottom" tests form on tiny, marginal, new lows being set. Back to the volume comment made earlier, this makes sense to me as if the conviction of sellers is dropping, buyers, short covering, etc will quickly overwhelm the selling pressure that remains and this may well support a thrust back up to the trading range. The confirmation of the test will happen if Friday's highs are taken out; and if that happens, I'd certainly like to see Monday's (Feb 26) daily high taken out quickly too. If that plays out, then as you say we will have to continue to be wary of any retracements within the trading range, since they may well turn into a solid move down to yet new lows. Its exactly that kind of diabolical 'lull people into complacency' and die move that seems most diabolical and therefore likely to happen.