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

To: Square_Dealings who wrote (79440)	7/2/2001 7:05:21 PM
From: eichler	Read Replies (1) \| Respond to of 99985

Money shuffle and confusing price action (appearing to maintain rally but is it really rallying?) is deliberate (IMO) and is succeeding in inducing the complacency evident by the VIX and VXN. Of main interest to me is the presumed Complex H&S pattern, the break of the neckline 6/14, the failure so far 6/28, 6/29, 7/2 to break that neckline to the upside (at least on a closing basis) and the return to overbought levels for the indicators on the daily compx chart. Even ignoring the controversial pattern, just looking at the chart from a simplistic view, there is another alarming pattern not being recognized or discussed much. 5/22 - high. 5/30 - low. 6/7 lower high. 6/20 lower low. 7/2-5???lower high??? Noting that the highs and lows are separated by 5-8 trading days, it appears that a high is due about now. I agree that the market needs to tank and get it over with. It would be aesthetically pleasing if the full moon date of 7/5 roughly marks the turnaround of the current rally. But as N.V. has pointed out, short interest is at record levels and recalling the statement by Hahn I re-posted from another thread that true bear markets tend to clean out bears and bulls alike, perhaps there is too much betting on the short side for an effective washout at this time (but then again maybe not if it is the commercials who are so short)...even though the VIX readings indicate concurrent excessive complacency; a confusing mixture of indicators. One thing that is exceedingly clear to me at this time is that layoffs are occurring at a dizzying rate, more tech companies are on the brink financially, earnings continue to be soft, the R word being mentioned more, and scary games are being played (accidents? glitches?) with more frequency which are benefiting the bigger players (trading access) to the detriment of the smaller players (trading access being denied). None of this makes me think we are out of the woods yet and definitely the ingredients which make up a meaningful stock market advance are not in abundance. Will a lousy tax rebate induce consumer spending and overcome reductions in employment? Will the flurry of rate reductions turn the economy around right now while economic indications are weak? Will softening of energy prices from outrageous levels to lower but still high levels calm the fears of the public and ease up on the pocketbook outflow? I have grave doubts. Of note too is that Rydex ratios have tipped back to the bearish side again. Message 16021251 I think the market is nicely set up for another "spanking" (nicholas...lol). Whether the market gets it is yet another question, but IMO, a window of opportunity is yet again present. Eichler