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

To: Zeev Hed who wrote (71663)	3/10/2001 1:07:50 PM
From: bobby beara	Read Replies (3) \| Respond to of 99985

Zeev, that divergence on jan 2nd, plus may wave counts and the tremendous amount of pessimism, good morning america had a couple of stock analysts on in their first segment on the morning of the 2nd, lot of fear in the media, plus all the doom and gloom in the headlines around the bay area. the 900 new lows i thought was a selling climax and i told dmp to get long and strong the next day, i also noticed the late december rally was a bear flag and exited for a short swing into the jan 2nd low, but covered in a hurry when my wave count and the good morning america interview was telling me we were in panic mode, i luckily got long and strong fully before the fomc lowered rates. there is a divergence now, but i don't see the same level of fear and none of my indicators are giving me the kind of signals they gave then to make sure that we have seen a real bottom. There would probably be a lot more new lows now if the december selling climax wasn't driven even harder by tax loss selling, doesn't also mean the new lows list will grow even more over the next week. stockcharts.com[m,a]daclyymy[df][pa20!a30!a13][vc60][iUb14!La12,26,9] there are plenty of late toppers that good give more of the bubble up. Oh another sentiment indicator i have noticed coming out near trading lows during nov/december was my netscape mail headline coming up with something about the stockmarket slide, that happened on friday, also we had 90% downside volume on friday, but not a/d. might have been good enough for a st rally, but i'm mostly watching with some of those gold stocks that haven't been sucking so bad lately -gg- imbo

To: Zeev Hed who wrote (71663)	3/12/2001 2:42:48 AM
From: bumboo	Respond to of 99985

Zeev, I thought I'd respond because I've seen this point being made in a few other posts (i.e., about the positive divergence in the new lows). During the 1973-74 bear market, there was a similar situation where the NYSE price made a lower low in 01/74 but there were fewer new 52-wk lows made than during the previous low in price on 05/73. Unfortunately after a very brief rally, the NYSE resumed it's downtrend and made a significantly lower low in price after another ten months. And the 52-wk lows at that time weren't dramatically higher either. In fact, a higher number of 52-wk lows were seen at the first price low (05/73) than at any of the subsequent lower lows in that entire bear market. This indicates to me that in an extended bear market, a positive divergence in breadth indicators may only be good for a short counter rally before the major trend resumes. Also, in this type of environment, 52-wk lows may not be a good indicator of a climatic sell-off (i.e., "the big kahuna capitulation bottom" that everyone seems to be looking for). We could very well grind down for another 6 to 12 months with the 52-wk lows surging now and then but never really signalling the kind of capitulation we saw at the '98 bottom.