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To: aerosappy who wrote (11819)	1/21/2002 9:00:54 AM
From: jim_p	Respond to of 23153

THREE STRIKES FOR THE NDX A negative divergence occurs when price movement is not confirmed by internal indicators. In the case of the Nasdaq 100 we can see a price move to a double top, but our three primary intermediate-term indicators have made much lower tops. These indicators screen the three basic elements of price, breadth, and advance-decline volume through similar calculations that give us an x-ray view of the patient. Clearly, the momentum in price*, breadth and volume have lagged badly into the last price peak, and the ITBM and ITVM have dropped below the zero line, indicating a very dangerous situation. On the positive side, price has failed to confirm the internal down trend by remaining in a trading range, meaning that the super-large-cap stocks in the index are not as weak as the smaller-cap majority in the index. Nevertheless, the intermediate-term picture is one of weakness, and short-term rallies should be considered suspect until these three indicators make decisive up turns and a price breakout above the trading range occurs. --Carl Swenlin

To: aerosappy who wrote (11819)	1/21/2002 9:02:17 AM
From: jim_p	Respond to of 23153

The Rhodes Report Last week's breakdown in the major indices indicates that a much warranted correction is under way, or in a worst case scenario, that a resumption of the longer-term downtrend has materialized. In either case, the question becomes how will technology perform relative to its 'old economy' brethren. If one looks at the Nasdaq Composite vs. Dow Industrials ratio, it is clear that since September 2001 - the ratio has risen indicating technology has outperformed 'old economy' stocks. However, this ratio is slowly breaking down from a technical perspective, as the 20-day stochastic is moving lower as overhead resistance at .205 is proving untenable. Thus, at a minimum, we would expect a move back to the December 2001 lows, and quite possible back to the early October 2001 lows at .165. Simply said, technology shall underperform relative to other sector shares. Good luck and good trading, --Richard Rhodes

To: aerosappy who wrote (11819)	1/21/2002 9:03:09 AM
From: jim_p	Read Replies (1) \| Respond to of 23153

John Murphy's Market Watch CLOSES UNDER DECEMBER LOW... The Nasdaq 100 is a very important index. Right now, it is probably the most important of all. Since it's comprised of the biggest Nasdaq stocks, it tends to determine the trend of the Nasdaq Composite itself. That's why we think today's chart breakdown is a bad sign for the market's short-term trend. The Nasdaq 100 ended down 3.3% today compared to the Composite loss of 2.8%. That compares with an S&P 500 loss of -.99% and a Dow drop of -.79%. That means that the Nasdaq 100 is pulling down the Nasdaq Composite, which in turn is pulling down the rest of the market. The chart below shows the Nasdaq 100 closing below its December low of 1557 -- after having broken both moving averages earlier in the week. Notice also that the (blue) 50-day line is nearing the (red) 200 day line, which is usually a resistance barrier. We suspect the 50-day will now start dropping as well -- another negative omen. The MACD lines are not only negative -- but are diverging. In addition, the 14-day RSI has fallen under the mid-point line at 50 and is now trading at 42. It has to reach 30 to get oversold. --John Murphy