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To: Les H who wrote (1422)	2/4/2002 7:32:47 PM
From: Les H	Read Replies (1) \| Respond to of 29596

What to expect now. February 4, 2002. Ord. On January 30 a bullish candlestick pattern called a "Hammer" was drawn. A bullish 843-downtick reading was recorded on January 29. Today another bullish downtick reading was recorded hitting a high today of 948. The "5 day ARMS" closed at 8.36. Readings over "6.00" area bullish. However, bullish readings can persist for awhile before the market reverses. The "Percent Volume" indicator closed at .40 and just neutral. The VIX closed at 26.85 and is in bearish to neutral position. For very short term the S&P is oversold and a bounce can materialize at anytime that may take the S&P back to the previous high near the 1135 level. The bigger trend is still down and our first objective is near the 1055 level. We plan to take trades with the trend and since the trend is still down, we will wait for the bounce and look to short the SPY at the next sell signal, possibly near the 1135 level. The VIX is much to low to expect a strong rally from here. The VIX should approach the 40 reading, if not higher on the next significant bottom. Our minimum downside is the 1055 area for the intermediate term bottom. We are still short the SPX (from an earlier period) with a downside target near the 1055 level. Can the Nasdaq Composite bounce from here and allow us to get short again? The VIXN says the bigger trend is down and lower prices will be seen for the intermediate term. The short-term stuff we watch is in over sold territory. But it can remain over sold for an extended time. One of our downside targets is the 1650 level on the Nasdaq Composite. That's a 61.8% retracement form the September 21 low. The VIXN should reach to extremes at the next intermediate term low, approaching the 70 area. The NDX closed below the January 30 low today and can imply a break to the downside. However, the Nasdaq Composite closed above the January 30 low on this re-test and did so on lighter volume, which implies a bullish scenario. We will not attempt to play the bounce but rather wait for the bounce to be completed and then short the market. No new trades on this index for the moment. The XAU longer-term picture is bullish. We sold ½ of our position in Drooy on January 14 because of the bearish candlestick patterns drawn for three days on that stock. Since then, Drooy has rallied strongly hitting a high today of 2.86. Today Drooy gapped up and completed a bullish "Fry Pan Bottom" that started back in 1999. There is over 2-½ year of "Cause", which implies this rally is still in the early stages. We sold ½ of our position around $1.55 that we bought at $1.05. Our upside target on the XAU is still 95 minimum for the longer term. We still like ASA, AEM and HL for the longer term. Be patient on Gold stocks, they will work higher. marketweb.com