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Strategies & Market Trends : Stock Attack -- A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Chris who wrote (13095)	7/25/1998 10:52:00 AM
From: Sonki	Read Replies (4) \| Respond to of 42787

weekly index % change dji, sp, NAZdaq and ndx 07/18 7/25 wk to wk stat ... 7/18 7/25 DJI 3.46 -4.29 S&P 3.52 -3.87 NAZ 6.06 -3.87 NDX 5.25 -3.78 dell 17 -11.00 (approx guess) dell moved 17% in one week last week. dow did not move up w. the rest on 7/18 but came down the most 7/25 s&p gave back it's gains naz performing well by not giving back so much even better then ndx. does that show move to small and med cap? i.e. value investing? mony moving out of hi pe multi national where there was suppose to be safety but are now warning. moving into value. i think semi cond. stocks and cyclcial stocks who lost market cap last few months will move?

To: Chris who wrote (13095)	7/25/1998 2:15:00 PM
From: Robert Graham	Respond to of 42787

Yes, this does not paint a pretty picture for the near term of the market. Using this index as a basis for understanding what can happen next in the market, it looks like if the market does not bounce Monday, there will be additional selling, perhaps enough to technically damage for the longer term some of those stocks that I have looked at earlier. I think the additional selling is entirely possible and we will have to wait to see the technical damage this will do to key stocks in the market. What is the next significant support? At 8750? A move to 8750 can be enough to alter the technical condition of the stocks that I have looked at. This depends on where the selling will take place, or how broad the sell off will be. But with the DJIA below its 50 day MA the prospects for the market does not look good as far as how far the market can go up without participation by its Dow component. The NASDAQ still looks like its in technically good shape where the sell off it has encountered can be recovered from. But I do not think it will be making any news highs soon since its momentum has broken down. Consolidation looks to be in order here before resuming an uptrend. The NASDAQ is at an important support. If it were to break through this support, it will then test its 50 day MA. The SPX is at its 50 day MA. However, its momentum has been damaged in a substantial way which makes recovery at this point less likely. So between the SP 500 and NASDAQ, it looks like the market can bounce Monday. But I would wait to see if a bottom has been actually made that the market can move up from. I would use a bounce on Monday a very useful market generated information. By the way, I use the standard MACD and how the two EMAs move with respect to each other as a broader measure of momentum of a stock. For instance, on the SP 500, its MACD has turned down below its signal line. Look at the way it has turned down at a very steep slope right from a position that indicates a fair degree of momentum for this index. To me a qualitative read on the degree of momentum is be now far apart the two EMAs are and at the beginning of an uptrend how quickly they move apart. Sometimes you can anticipate a strong move up but how quickly the MACD curves up from below to break through its signal line. At junctures for a stock, the Stochs can provide a more sensitive measure of this. So to me this picture with the MACD indicates significant damage to the longer term momentum of the stock. Definitely nothing that a stock can spring board from on a renewed rally. This together with the Stochastics in a strong downward slope having further to go to meet a resistance tells me there is further downward movement to go. This does not mean that a pullback at this point from the sell off is not possible. It is just that I would question such a pullback in this scenario. IMO the S&P 500 meeting its 50 day MA is entirely possible. Any thoughts? Bob Graham