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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: bobby beara who wrote (82800)	3/12/2002 12:37:41 AM
From: KymarFye	Read Replies (1) \| Respond to of 99985

I'd post you back with my own NDX chart, one of the purtiest charts I ever did make, but &%^@!& PacBell's doing some kind of mysterious "maintenance" on its customer pages, been going on for days now... Oh it's sad. Such a purty, purty chart... Sentiment-wise, it seems like valuation gravity hit hard - around the same time that the SI-reported Reuter's headline read "Stocks to Rise on Optimism" and Alan Abelson (!) complained about a lack of bad news... A further uptick in the VIX or VXN might seal the deal at least on this leg of the rally... Anway, by my sadly invisible calculations, the NDX has marginally penetrated then reversed two sessions in a row at a confluence of resistance levels: 1) historical s/r, most recently marking the neckline of the head and shoulders top that broke down in January; 2) the 61.8% retracement of the drop from the left shoulder to the Feb. low; 3) the 200 DMA; 4) the 261.8% left-shoulder projection from the inverted head-and-shoulders bottom that broke out on March 4 (refer to intradays - the math on the last one is picture perfect - the neckline + 2.618[neckline - shoulder] = 1555.) In the meantime, the index tested the uptrend line from the 2/28 swing low twice today, and has formed an ascending wedge - something like a wedge within a wedge. If the lower boundary/trendline breaks, I'd expect a pullback at least to fill the "unemployment gap" from Friday, possibly overshooting to 1488 or so - which would be a conservative measurement for a wedge breakdown that also coincides with a good re-tracement level off the swing low. My crystal balls start getting too fuzzy there for further projections (it's way beyond my normal trading horizon), but at that point the odds of further re-tests lower would seem at least as good as of any immediate resurgence upward.