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To: John Madarasz who wrote (1547)	3/2/2002 2:13:19 AM
From: Les H	Respond to of 29596

I show 20-day historical volatility having risen today for both the OEX and NDX. OEX HV is at 21.5. NDX HV jumped to 39.15. They're usually supposed to jump on sell-offs. OEX is also stretched outside its upper bollinger band, probably also contributed to jump in HV. But increases in HV does provide less downside for the VIX and VXN. VXN, in fact, recorded a 21-day stochastic of zero today. Both VIX and VXN implied volatilities are pretty near the historical volatilities of the underlying.

To: John Madarasz who wrote (1547)	3/2/2002 10:26:06 AM
From: Les H	Read Replies (2) \| Respond to of 29596

ivolatility.com is showing the same jump in volatility on yesterday's rally as my chart program ivolatility.com NDX options implied volatility is 35 NDX options historical volatility jumped to 39 from 31 10-day historical volatility jumped to 50 ivolatility.com OEX options implied volatility is 19 OEX options volatility went to 21.5 from 20 I normally see volatility move up in the rally off the first bottom in an IT bottom. The volatility will peak at the second bottom, and then drop as the market rallies out of the W. Historical volatility (HV) also spiked in each of the failed rallies last summer for the NDX. HV fell as the NDX fell since the 21-day MA was also falling at roughly the same rate as the index.

To: John Madarasz who wrote (1547)	3/4/2002 6:13:40 PM
From: Les H	Read Replies (2) \| Respond to of 29596

What to expect now. March 4, 2001. Ord. The McClellan Oscillator never did have a negative divergence off the lows of February 20 because the S&P stayed in the rally mode. The S&P very well may have made and an intermediate term low near the 1075 level. At one point, we were looking for a test of the 1055 level. The McClellan Oscillator reached to plus 156 today and that does show strength to the upside. However not all indicators are showing "All Clear sailing" signs. The VIX is still in a bearish intermediate term level, closing today at 22.16. Therefore, we do not expect the market just to head straight up from here. There are also time cycles for a high coming now (from March 1 to the 6 - plus or minus one day). There is an ABC target for a high near 1150 level and hit in that region today. The "Percent Volume Indicator" closed at .64 and is as high as it gets. There is a gap left open that formed between February 28 to March 1 near the 1110 level. We expect that gap will get filled before the month is out. No bearish candlestick pattern formed today. The VIX says the S&P is still in a topping area, closing today at 22.16. S&P may be near a short-term top at current levels. Staying flat for the moment. The NDX has broken out of the "Channel" we have drawn on the graph. This is a warning that the NDX may be approaching an intermediate term low. However, we don't believe that the NDX has made the final low yet and we expect the recent low of February 22 (1329.93) will be broken on the next decline. The VIXN hit a new 12-month low today and one of Larry Connor's VIXN indicators hit a sell signal today. No bearish candlestick patterns were drawn today. No negative divergence has occurred on the NDX McClellan Oscillator today. Right now you have to say the short-term trend is up but could peak at anytime. The XAU longer-term picture is bullish. Drooy came out with news today and affected it negatively. We own Drooy and trying to buy more near the 2.05 gap area. ASA completed a bullish "Fry Pan Bottom" on the Weekly charts. Short term, ASA may pull back and fill the gap near the 23 level. 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. Short term, a consolidation has started that may last into late March to early April. In Elliott Wave terms, the XAU appears to be in a Wave 3 up-leg on the monthly charts, which is usually the strongest wave up. Our upside target on the XAU is still 95 minimum for the longer term. We like Drooy, ASA, AEM and HL for the longer term. In short, look for a consolidation into late March than up. Big bull market. marketweb.com