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Strategies & Market Trends : Galapagos Islands -- Ignore unavailable to you. Want to Upgrade?

To: Jorj X Mckie who wrote (3177)	9/29/2002 4:52:37 PM
From: Libbyt	Respond to of 57110

Don Sew Market notes... Thanks to nikko_thyme...who passed on these notes as well as mentioning it is free to become a member of MarketSwing.com and get automatic email notifications when the chats are happening & the notes. (I joined...but found the MarketSwing site very slow...maybe server problems today?) Posted by: Iblayz All indices are in the Lower Midrange or Midrange. P.S. For those that wondered like me how the Naz could have been overbought Thursday Don pointed out that it entered the borderline overbought range at the intraday high area. Issues that Don is pondering. With Dow's big drop Friday the Naz and the Sox did not go down nearly as much. Even with the Friday selloff the Capitulation Indicator still turned down for the week though not by a lot. It could Zig-Zag here or go higher. If it continues down could signal a nice rally. The market internals were not bad Friday for the Nasdaq or the Sox. There is still a positive divergence re: the New Highs/New Lows. Don doesn't look at the New Highs/New Lows in terms of raw numbers. Rather he looks at the chart relative to the overall index. Right now with the Market at or below July/August lows the Net New Highs/New Lows is not nearly as bad as it was then. The Dow Re-tested its October 1998 closing low of 7539 with a low of 7533 and bounced. Now that it has given back nearly all of that gain he suspects it will now re-test the October 1998 intraday low of 7402. If that happens (and for example the DOW dropped to 7350) and the NAZ/NDX drop proportionally the size of the drop would be approx. 55.5 pts. pointing to roughly 1145 on the Naz. Many are looking for 1000 or below on the Nasdaq. Don does not think it goes there now although he remains confident that eventually it will go there and below. Shorter term the 3 day pattern did not complete. This failure does not rule out upside from here but it is a bearish hint. Does not signify a crash but probably limits the upside move somewhat. Don previously mentioned that a 55 day fibonacci Cycle low was Due on October 10th. With the Friday selloff this is now feasible. Don keeps a buffer on these of +/- 4 days. If the DOW drops significantly below 7400 and the NDX drops significantly below 800....watch out below! Due to the fact he would be traveling Friday Don closed his UOPIX position (profitably) at the close Friday. He is still holding QQQ calls. Don mentioned that successful re-tests are viewed in the +/- 7% range. If the NAZ and NDX hold in that +/- 7% range off the July/August lows (remember that the NDX bottomed in August NOT July) that would be considered a double bottom and double bottoms usually lead to significant rallies. With the drops in the indices the minimum requirements for Class 1 signals have dropped. He now views the minimum for the NAZ/NDX at 50-75 pts. and both fullfilled that requirement at Friday's highs as Rocks pointed out. Interesting note. Even years are election years. Don looked back (I don't recall how far) and all Octobers in election years with the exception of the year 2000 were positive. (Personal Note: Keep in mind that in 2000 we were still early in the unwinding of the bubble.)