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To: Les H who wrote (799)	10/8/2001 7:37:00 PM
From: Les H	Read Replies (1) \| Respond to of 29609

What to expect now. October 8, 2001 marketweb.com We covered our short in SPY at 107 today. Market appears to be in a mild consolidation and one more test or modest break of the October 4 high is likely. The next break of a modest new high should form the next short term top. There is a good possibility the SPY could rally to 110 to 111 areas before topping out for the short term. The "5 day ARMS" closed today at 5.10 and is just neutral. The "Percent Volume" indicator closed at .54 and is in overbought territory. The uptick readings have been having bearish readings for the last several days and warning a short term top is not far off. Sometimes short-term tops take longer to develop than short-term bottoms. To complete this potential short term top, we like to see a modest break of the October 4 high on the S&P on lighter volume and close below that high and also coincide with a bearish candlestick pattern. Flat the SPY for the moment. General Electric drew a bearish candlestick pattern called a "Bearish Engulfing" pattern on October 4, triggering a sell signal. Our downside target is the gap area formed on September 17 near the 31.50. We are holding the GE November 35 puts. The NDX drew a bearish candlestick pattern called a "Shooting Star" on October 4. We have found a lot of "Shooting Star" highs are re-tested. The high on the "Shooting Star" day on the NDX was near 1314. Today's high was 1297. On today's rally the volume was near 47% lighter than the October 4 high and is a bearish sign. The "5 day ARMS" on the NDX came in today at 2.94. Readings below 3.5 appear at tops. The last time the "5 day ARMS" was this low, came on August 1 with a reading of 3.44. The market peaked on August 2 and fell 300 points in the next three weeks. To have an ideal setup for a sell signal, we like the NDX modestly break above the October 4 high of 1314 and close below that high and draw a bearish candlestick pattern. That setup could appear in the next day or so. We are flat the NDX and QQQ for now. The XAU may consolidate to the first part of November before the strongest part of the up-move begins and that up-move may last into next year. We were hoping the rally would start in October. Still, most gold stocks are making higher highs on increased volume and remains in a bullish up-trend. Our upside target on the XAU is still 95 minimum.