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To: Les H who wrote (194)	5/21/2001 7:23:25 PM
From: Les H	Respond to of 29606

WHAT TO EXPECT NOW May 21, 2001, Ord. The "Three drives to Top" pattern may still be in effect. Today's rally was on lighter volume above the previous high of May 17 and is a negative divergence. The "5 day ARMS" closed today at 3.53 and is in bearish territory along with the "Percent Volume" indicator at .68 (readings above .57 appear near highs). However price worked higher and is bullish. The sentiment readings on most services show way to many bulls, which usually leads to a short-term top. The VIX closed today at 23.22, is one of the lowest readings in months, and is a bearish sign. If the rally continues tomorrow than we would have to say the rally would continue to the next level of resistance, this is the 1390 area on the SPX. We did short a ½ position on the SPY at 129.25 with a stop at 132. We will leave this trade as it stands. We finally got to our 1980 target on the NDX and passed it. The volume at the May 2 high was 2.47 billion shares. Today's rally had 2.21 billion shares. Therefore, today's rally broke above the May 2 high on 10.5% less volume. We like to see the volume to be within 5% or less of the previous high volume for confirmation of a break out. Therefore, we are not convinced of this potential breakout. The "5 day ARMS" indicator came in today at 3.14 and is the lowest reading dating back to August 2000 going into the September 1, 2000 top. There is a "Wyckoff" term called "Ice" right around the 2060 level on the NDX. If the NDX can't make it through the "Ice" on good volume than that area will become resistance. Most Sentiment readings are overbought here. No bearish candlestick pattern formed today on the NDX. Standing aside for now. Finally, the Gold market is showing signs life. According to "Advance GET" on the monthly charts, a target near the 330 level on Gold is projected. Most gold stocks look to be good buys on a longer-term perspective. We are staying long the XAU.