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

To: Les H who wrote (71376)	3/6/2001 1:00:02 PM
From: Les H	Respond to of 99985

WHAT TO EXPECT NOW. March 5, 2001 On February 23 a bullish candlestick pattern formed on the March S&P called a "Hammer" and coincided with the second high downtick reading of 748, which triggered a short term bullish signal. The volume on that day was 1.35 billion shares. On March 1, the March S&P tested the February 23 low and the volume shrank to 1.28 billion shares. A test of a previous low on lighter volume is a bullish occurrence. We like to see the re-test on a 10% decrease in volume or more. However, the test was on lighter volume (though not 10% less) and the market is now expected to start rallying higher. We might add, the test on March 1 did draw an another bullish "Hammer". On February 23 the McClellan Oscillator reached -183 and the re-test of March 1 reached only -104, which shows positive divergence. We haven't so far come of the lows much but we expect that to start happening this week. The first upside significant resistance area is where a gap formed between February 15 to the 16 near the 1330 level. That will be our first target. We are long the SPX at 1241.23. The NDX is not showing quite as a strong bottom as the S&P in volume valuations. On March 1 the NDX did break to a new recent low on volume of 2.16 billion shares and drew a bullish candlestick pattern called a "Piercing Pattern". Normally high volume low needs to be tested on lighter volume as proof the market can not go lower. The lighter the volume on the re-test, the more bullish the condition. This potential re-test on lighter volume is still in front of us. Since the S&P have generated a bullish reversal signal, we expect the re-test on the NDX to be successful and generated a bullish signal. The "5 day ARMS" on the Nasdaq have stayed above "7.00" for weeks now and this implies the NDX is over due for a rally, now. An upside gap formed between February 15 to the 16 near the 2350 area. Markets are attracted to open gaps and once they get there, they turn into resistance areas. Our first upside target is the 2350 level on the NDX. We also own the QQQ April 50 calls at 4.10. The QQQ may test the recent lows also before heading higher. We may add to this position near to the March 1 low near the 46 level. Our side target is the 58 to 59 levels. (We are working on adding the NDX candlestick chart to our format and will appear in the near future.) We are bullish on gold. Wave "1" up was the October 1999 rally. Wave "2" down may have ended at the February 16 low. Wave "3" up has begun. We are long the Xau. marketweb.com