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To: Les H who wrote (1597)	3/11/2002 6:49:41 PM
From: Les H	Read Replies (1) \| Respond to of 29596

Waiting for a bearish pattern What to expect now. March 11, 2001 The SPX (S&P cash index) needs to break the January 7 high above 1176.97 and than close below that level to prove the market can not go higher. This pattern just describe is called a bearish "Upthrust". This condition would generate a sell signal and we would like to short the SPY on that signal. Today's high on the SPX was 1173.03, four points shy of our target. The "5 day ARMS" closed Friday at 4.19 and is bearish. The "Percent Volume" indicator closed at .62 on Friday and also bearish. The McClellan Oscillator has had a negative divergence at the recent highs and is a bearish sign for short term. There is good support near the last breakout level near the 1120 level on the S&P and would be our downside target on the next sell signal. We are looking for this sell signal to be completed this week. Flat for the moment. The Nasdaq ARMS index closed Friday at .36. ARMS index closing below .39 predicts a short-term top will materialize in the next one to three trading days. This technique has had a good track record over the years. Since the May 22 high of 2001, the ARMS index close readings below .39 on the Nasdaq appeared 10 times and short-term tops occurred with in three days 7 times. The three times the ARMS closing reading did not pick a top, two times the market went sideways. Therefore, we don't like to bet against this indicator. Up to Friday, the McClellan Oscillator on the Nasdaq did not produce a negative divergence. Today however, the NDX hit a new short term high and the McClellan Oscillator made a lower high. No bearish candlestick patterns were drawn today. Today's new short term high was on less volume than the previous high set Friday and implies there is less force to the upside. We don't have a trigger for a short on the NDX yet, but we do think one is coming very short term. If a signal is generated, we are looking for a pull back to support near the 1430 area on the NDX. Flat for the moment. The XAU longer-term picture is bullish. 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. ASA pulled back and fill the gap on the weekly chart near the 23 level hitting 23.10 on Friday. We think near the 23 on ASA is a good buy area. 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 to early April. marketweb.com