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To: Les H who wrote (1469)	2/11/2002 7:15:13 PM
From: Les H	Respond to of 29596

What to expect now. February 11, 2002. Ord. On January 30, a bullish candlestick pattern called a "Hammer" was drawn that coincided with a bullish 721-downtick reading. February 4 and 6 had downtick readings that exceeded 900, which are bullish readings. February 7, the S&P tested the January 30 low on lighter volume and closed below the January 30 low. What normally happens to have a successful test the test should close above the previous low on lighter volume. However, the "5 day ARMS" was in bullish territory closing at 7.60 along with the bullish reading on the "Percent Volume indicator, closing at .34. The McClellan Oscillator did not have a bullish divergence at the February 7 low. Although there may be a bounce here, we don't think it is at the final low. A rally up to resistance near the 1115 to 1130 areas is implied for the short term. We will look for the "5 day ARMS" to approach "4.00" range (closed today at 4.50) and the "Percent Volume" indicator to approach or exceed the .55 area (closed today at .55) to imply the rally has run in course. This rally may run out of steam by Wednesday or Thursday between 1115 to 1130 area. The VIX closed today at 23.54 and in the topping area. We are holding our short the SPX for a target near 1055. The VIXN says the bigger trend is down on the Nasdaq and lower prices should be seen for the intermediate term. The VIXN closed today at 46.41 and is in an area that is associated with the Nasdaq being near a high. The NDX may rally up to resistance near the 1500 area. The volume was extremely light today and implies the rally does not have a big force behind it (unless volume comes in later). Both the VIX and VIXN dropped over 1.90 points today and do not bode well for the rally. This rally attempt may last into Wednesday or Thursday but the upside should be limited. We will look for the next sell signal to develop later this week near the 1500 level on the NDX. No new trades on this index for the moment. The XAU longer-term picture is bullish. Drooy hit a high of 3.03 recently and is now consolidating. There are two targets, one near 4.00 for a sell that should lead to a 8 month consolidation and one at 2.05 which should act as support and start the next rally from. We are a buyer at 2.05 and seller near 4.00. ASA completed a bullish "Fry Pan Bottom" on the Weekly charts. It also had a "Sign of Strength" last week on the Weekly chart and is a longer term bullish sign. ASA may attempt to pull back and fill the gap near the 23.00. ASA closed above the 1998 high last week and is a longer-term bullish signal. HL has not broken out of its trading range, but we do expect it to happen this year. HL needs to close above 1.60 on good volume to do this. The rallies on HL have been on good volume since the April 2001 low. This condition for tells future strength in HL. If a successful break of 1.60 materializes this year, we expect HL will go to 2.60 minimum. Most gold stocks have turned the corner to the upside for longer term. Short term, a consolidation has started that may last several weeks. Our upside target on the XAU is still 95 minimum for the longer term. We still like Drooy, ASA, AEM and HL for the longer term. marketweb.com