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To: donald sew who wrote (55890)	10/20/1998 1:05:00 PM
From: Andrew C.R. Biddle	Respond to of 58727

Don- Again it seems you and Helene Meisler agree. Here is an excerpt from her article today. >>So why aren't I more bullish? First, while not yet overbought, the market will be in an overbought condition by the end of this week. This is not necessarily bearish, but will make it more difficult for the market to gain momentum when we reach that overbought reading. That suggests a short-term pullback. Next, the number of stocks making new highs is quite low. One reader pointed out that at least the names on the new-high list were real companies (not just utilities and funds) on this rally rather than September's rally. That is very true. But if this rally's so great, then why were there only 39 new highs Monday vs. Friday's 56? If this market is going to power ahead from here, this indicator should be expanding, not shrinking. This suggests stocks are somewhat tired after their run from 7400 and are in need of a short-term pullback. Also, the advance/decline line has yet to surpass its September high. It is quite doable, but will feel late and tired when it gets there. Another reason for a short-term pullback. << Full story at: thestreet.com Andrew

To: donald sew who wrote (55890)	10/20/1998 1:16:00 PM
From: Compadre	Respond to of 58727

Donald: The market looks tired now. volumes are very high. I think the pullback will come by the end of the day. Regards, Jaime

To: donald sew who wrote (55890)	10/20/1998 1:17:00 PM
From: Nancy	Respond to of 58727

don, someone observed the same thing re: new high The Chartist: Then and Now By Helene Meisler Special to TheStreet.com 10/20/98 10:15 AM ET Just about 10 days ago I asked in this column, "Is there a bull in the house?" because there were none to be found. If they were there, they were deep in hiding, afraid to speak their minds about the few positives out there. Market players chose to look at the glass as half-empty, rather than half-full. There were the talking heads on TV. I received numerous emails describing the imminent breakdown of Dow 7400. Targets of Dow 6000 were commonplace. The world as we knew it was falling apart. C'mon, you remember, it was only two weeks ago! Ahh, but that was then, this is now. In these past few days since the Federal Reserve cut rates in between meetings, there has been a complete turnaround in sentiment. Bullishness abounds! What I find most amusing about this is that it's not the fundamentalists who have turned bullish, but the technicians! Since when did technicians start caring about fundamentals? Funny, I think this is the first year since the crash in '87 that no one even mentioned the anniversary of the crash. On a momentum basis, most of the indicators I look at continue on their upward path for now. The market is not yet overbought. Many other momentum indictors (the 10-day moving average of new highs and new lows and the McClellan Summation Index, to name two) are pointing upward and acting quite well. So why aren't I more bullish? First, while not yet overbought, the market will be in an overbought condition by the end of this week. This is not necessarily bearish, but will make it more difficult for the market to gain momentum when we reach that overbought reading. That suggests a short-term pullback. Next, the number of stocks making new highs is quite low. One reader pointed out that at least the names on the new-high list were real companies (not just utilities and funds) on this rally rather than September's rally. That is very true. But if this rally's so great, then why were there only 39 new highs Monday vs. Friday's 56? If this market is going to power ahead from here, this indicator should be expanding, not shrinking. This suggests stocks are somewhat tired after their run from 7400 and are in need of a short-term pullback. Also, the advance/decline line has yet to surpass its September high. It is quite doable, but will feel late and tired when it gets there. Another reason for a short-term pullback. Finally, the averages, as well as many individual stocks have met resistance. The Dow's resistance begins here in the 8500 area and carries all the way up. The S&P has some trouble here, and all the way to 1080. The same can be said for Nasdaq and the Dow Jones Transportation Average. This suggests a short-term pullback to digest some of the recent gains. During the process of building bases it is quite common to have a series of rallies into resistance, only to back off and try again. There will be sellers who will view these rallies as gifts, as opportunities to sell stock that they didn't sell before. But at the same time, there will be buyers who feel they've missed the low and are eager to get on board; these buyers will typically come in and buy on the dips, afraid that if they wait too long it'll be too late. Until we exhaust the sellers on the upside, I believe rallies will continue to stall out at resistance. As I posted my individual stock charts, I noticed how many stocks are overextended yet on my positive list as "buyable at" some price. This means they are too close to their first resistance levels and require dips to flesh out the charts. The list of stocks that have reached resistance and are buybable into a dip (buyable price noted where obvious on the chart) include: American Express (AXP:NYSE) at 84, Citigroup (CCI:NYSE), Chase Manhattan (CMB:NYSE) at 44-46, Halliburton (HAL:NYSE) at 31-32, 3M (MMM:NYSE), Kimberly-Clark (KMB:NYSE) at 43-44, Merrill Lynch (MER:NYSE) at 45-47, and Nucor Steel (NUE:NYSE). See how many financials now appear likely to hold and be buyable into a dip? Some positive names that have spent the past week backing and filling and now look OK to buy again are Sara Lee (SLE:NYSE), Hewlett-Packard (HWP:NYSE), Intel (INTC:Nasdaq) and Amgen (AMGN:Nasdaq). I expect this short-term pullback to be just that, short-term and mild. It will likely begin late this week or early next week. A pullback of this nature would not only relieve the overboughtness we expect, but should improve the charts. It should provide us with a better buying opportunity. Author's Note: Forgive the absence of any indicator charts today. I had PC problems. With any luck the problems will be fixed within a day or two -- perhaps just in time to show the market's overbought condition on Friday ...