Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Lee Lichterman III who wrote (16322)	10/4/1998 6:22:00 PM
From: dennis michael patterson	Read Replies (3) \| Respond to of 42787

FAVORS!! It's Nuclear Winter. Jerry Favors Analysis - Sunday, October 4, 1998 7 p.m. The Dow at the lows on Friday was down over 100 points. The Dow then turned up and at the highs the Dow was up as much as 185 points. The Dow closed up 152 points at 7784.69. Our position remains basically unchanged. We believe the Dow reached a major high at 9367.84 on a print basis on July 20. The Bear Market began from there. So far the Bear Market has seen the Dow decline 1,967 points to a low of 7400.30 on September 1. Since then we have been in a corrective wave rally,which has so far seen the Dow rise 782 points to a print high of 8182.47 on September 24. The Dow has since fallen 652 points to a low of 7530.31 on October 2. Friday's reversal suggests some further rally early this week which will likely carry the Dow above 7841 on a print basis. The fact that the Trin-5 reached an extreme oversold reading of 8.18 on September 30 is reason enough to suspect some further rally is coming early this week. However any rally early this week will in no way alter our position that much lower prices are coming this month.In fact we have 3 short term cycles all coming together early this week calling for some sort of market top. The most likely time frame for the next short term high is October 5 to October 7. From that high all of our short term cycles will then join the longer term cycles pointing strongly downward until late October. The first truly reliable signal that the next major wave down is underway will be any close in the Dow below 7400. Since the September 1 low there have been 3 tests of the 7400 support but each time the Dow fell down near that level it turned and began another rally. The Dow reached an intraday low of 7496 on Friday October 2 but once again turned back up without closing below 7400. When we do close below 7400,which we believe will occur relatively soon,it will signal that much lower prices are coming. The first important support below 7400 will be 6933. If that level is broken,as we believe it will be,a very bearish signal will be given. We currently have 2 downside projections due within the next few weeks. The first is a projection we gave you over a week ago calling for 6703 plus or minus 270 points intraday. The second projection which has only recently been given calls for 6421 plus or minus 300 points intraday. In our most recent newsletter,which will be in the mail to you tomorrow,we discuss an important forecasting technique called "The Measured Move". This technique forecast the July 1998 all time high within just 4 points.If the Dow fails to exceed 8253 intraday on this week's rally attempt this same "Measured Move" technique calls for the next low near 6220 intraday. For now however we have to get through a rally attempt early this week. Stock traders and Mutual Fund switchers are 50% short with a stop now of any close above 8440.We will be raising positions to 100% short once this week's rally attempt has peaked. If the Dow closes below 7400 lower stops to 8253. Short term traders let's let this rally attempt run its course over the next couple of days and then go short. We will give you specific instructions on when to go short .