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Strategies & Market Trends : MP - Market Pulse -- Ignore unavailable to you. Want to Upgrade?

To: Les H who wrote (681)	7/16/2001 8:05:27 PM
From: Les H	Respond to of 1328

Bottom line on the market: July 16, 2001 The S&P probably have made a worthwhile low on July 11 near the 1170 area on the S&P cash index. A much stronger signal would develop if the S&P went down again to test that low on lighter volume and than coincide with a bullish candlestick pattern. From the March 22 low to the May 22 high the S&P retraced over a 61.8% of that up-move. This condition implies that the next time up the S&P should at most double top at the May 22 high. Therefore, the S&P appears to be in a big trading range where the May 22 high near the 1315 area is resistance and support should lie near current levels. To end up with a reliable bullish signal, the S&P would need to test the July 11 low on lighter volume and that coincided with a bullish cndlestick pattern. No new trades on the S&P for the moment. The NDX has the more bullish signal for the short term than the S&P. The "5 day ARMS" on the Nasdaq reached to 14.33 on July 10, the day before the short-term bottom on July 11. Reading between 10 to 12 on the Nasdaq ARMS are bullish and the more higher the number past 12 the more bullish the scenario. The day before the April 4 low, this indicator reached 15.85. Therefore, the "5 day ARMS" on the Nasdaq has generated a very bullish signal. A bullish "Wyckoff" trading method called "Shake Out" materialized from July 10 to the 12. This method can be described as a break to new lows on good volume and than reverses but into the trading range where it broke out from with in three trading days. This pattern than makes an attempt to test the "Shake out" low on lighter volume. The volume on the pull back to test the "Shake out" is the key. If volume is light on the pull back than the test is bullish and another strong rally will be anticipated. The lighter the volume on the pull back the stronger the bullish signal. On today's pull back to attempt to test the "Shake Out" low the volume remained light. If the light volume pull back continues tomorrow, we will attempt to add to our QQQ position. We also may add a QQQ August 45 call position tomorrow. Our minimum upside target will be the July 2 high near the 1860 level on the NDX and possibly the NDX could go as high as the May 22 high near the 2070 level on this up move. Tomorrow looks to be an important day. Gold for short term is in a minor downtrend. At the very latest, this downtrend could last into late August. It is worth noting that the longer the sideways trend the stronger the rally will be when it begins. This condition is called, building "Cause". The Month chart on Gold remains bullish and we are holding long the XAU. marketweb.com