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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Dealer who wrote (40585)	8/24/2001 10:19:51 PM
From: Dealer	Respond to of 65232

From Donald Sew: AUG 25 INDEX UPDATE ------------------------- Short-term technical readings: DOW - overbought region SPX - overbought region OEX - overbought region NAZ - overbought region NDX - overbought region SOX - overbought region VIX - CLASS 2 BUY SIGNAL(inverse to market) BTK - BORDERLINE CLASS 1 SELL SIGNAL, 3-WHITE SOLDIERS USD - upper midrange/borderline overbought, still within parameters of a RECTANGLE NAZ NET NEW HIGHs-LOW = NEGATIVE 23 5 DAY TRIN - 5.18 The minimum requirements of the recent CLASS 1 BUY SIGNAL have been fulfilled. And today successfully completed the 3-DAY PATTERN(UP-FLAT-UP). If the overall market continues to rally, I would get CLASS 1 SELL signals on TUE, and there is a slight chance for CLASS 1's on MONDAY. The one bright spot that occurred today was the 3-WHITE SOLDIERS in the BTK. 3-WHITE SOLDIERs is basicly the opposite of the 3-BLACK CROWs, and is also a very reliable and bullish pattern. Saying that, I must mention that the 3-WHITE SOLDIERS is against the overall market trend and in early JULY a 3-WHITE SOLDIERS in the BTK failed. Although I cannot ignore the bullish hints of a 3-WHITE SOLDIERS, I also cannot ignore that it is fighting against the overall trend, at least for now. The MAIN NEGATIVE I have for the NAZ/NDX is the NAZ NET NEW HIGHs-LOWs. Even in light of today's strong rally of 5.5% in the NDX, the HI-LOs could not break into positive territory, and closed at NEGATIVE 23. I am fully aware that it may take a few days for the HI-LOs to kick in, but if there is no significant improvement over the next few days, that would be a strong negative. Lets also keep in mind that the BEARISH RISING WEDGE in the NAZ HI-LOs already broke to the downside, which is already a very significant negative hint. stockcharts.com Frankly, until that DOWNSIDE BREAK in the NAZ HI-LO RISING WEDGE is negated by a strong upside move, I will remain suspicious of the rallys/bearish. Right now the US DOLLAR is still consolidating, and appears to be forming a RECTANGLE. RECTANGLES normally break in the direction of the trend which has been down. I didn't say it was 100%, just that if the USD does break the RECTANGLE to the DOWNSIDE, that would be another SIGNIFICANT NEGATIVE for the market. With the FRIDAY-MONDAY EFFECT, MONDAY should either be UP or FLAT(+/-20 NDX points). The market is now approaching the END-of-MONTH-RALLY timeframe. When I did my research on the end of month rally based on 30 years of data, I concluded that it started on the last 2 days of the month and extended 3-5 days into the following month. So since Monday is only AUG 27, did the end of month rally start early and just continue into early SEPT(very bullish), or will the market pullback a little at the forthcoming CLASS 1 SELL SIGNALS and rally again into early SEPT, or will it just end early with the forthcoming CLASS 1 SELL SIGNALs? Heck if I KNOW, I will just play my signals as normal. Im already starting to hear about the LABOR DAY RALLY. Im not saying that there wont be a LABOR DAY RALLY, but lets not also forget that SEPT/OCT is statistically the worse timeframe for the market, and that the EARNING WARNINGS PERIOD will start again around early/mid SEPT. Im not predicting how severe the earning warnings will be, just mentioning that it will start in early/mid SEPT. Most likely I will be closing my long positions and will start to leg into short positions sometime next week once/if I get my CLASS 1 SELL SIGNALs. No, Im not predicting a strong selloff, nor am I saying that it won't be strong; I'm just going to play my short-term signals as normal. If there is a strong selloff in the SEPT/OCT timeframe, I dont know for sure if it will break below the APRIL LOWs, but one thing I am very confident in is that once the sell off bottoms out in the SEPT/OCT timeframe, wherever that is, there will be some sort of a significant rally within the following 3-6 months. Of course I am not eliminating the possibility that NOV could also be negative, just making a broad comment.