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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Chip McVickar who wrote (5251)	12/12/2001 4:03:24 PM
From: John Pitera	Read Replies (1) \| Respond to of 33421

Chip, you've got some really nice material here. I think we've could see a continuation of of the stock market's rally we've been seeing since the 9-21-01 low. A near term acceleration could indeed occur. If the SPX and the DJIA climb through their 200 DMA's, it's believable that it could occur, as asset allocation models kick up their equity allocation. Here a 3 charts of the SPX and the NASD that are looking at Welles Wilder's research with the ADX and the directional Movement + and - indicators. In his landmark book, 'New Concepts in Technical Trading Systems" He says in section IV of the book that he has probably spent more time studying directional movement than any other concept. He was very happy when he came up with a specific mathematical formula. johnpsmarketlab.netfirms.com (these are big charts and to see them all on one screen resize your browser to 1280 x 1024 pixels or 1152 x 864 pixels. go to an empty part of your desktop and right click, select Properties and then Settings) on the first 2 year chart of the SPX the red ADX line reached a bottoming area on the study window above the chart that had previously given us tops in price in the SPX, but this time the market has continued to rally for a number of weeks. This suggests that we could have a bullish momentum quality, that has been absent since the March 2000 top. On the second PSX chart which is a 4 year chart, we can see that the blue study line which is the directional - (minus directional movement-- the ease of movement is down in price) reached the highest level since the near bear market of July 20th to oct 5th of 1998. the study at least suggests that the 9-21-01 low is related to or more like the 1998 low. the Blue Directional - line shows how powerful the selling pressure is and just as in the momentum study of cycles, Panic Lows are more pronounced and focused, than market tops. Panic Lows are more focused than greedy Topping action which can a diffusive multiple top quality. the NASD chart shows that this Bearish Blue Directional Minus oscillator reaches the highest level since the 4-14-00 low in the NASD. That Low was imo the most panicky of the 2000 bottoms we experienced. So the April 2000 low might bookend with the 9-21-01 low, and represent either a complete bear market or the first part of a longer secular bear market, in which case it would be represented in Elliott Terms as the A wave decline, that lasted 17 months. Thus we would be in a B wave rally that could last for a .618 multiple of 11 months or a 50% time multiple of 8 to 9 months. I'm doing some further examination of the longer term charts, momentum studies etc. John