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

To: Electric who wrote (17433)	11/5/1998 6:34:00 PM
From: dennis michael patterson	Read Replies (1) \| Respond to of 42787

Favors also thinks we may go higher, but not for long Jerry Favors Analysis Thursday November 5 8 pm At the lows this morning the Dow was down as much as 68 points,reaching a print low of 8714.91 .The Dow then turned and rallied to a high of 8917.27 ,at which the Dow was up another 134 points. We closed up 132.33 at 8915.47. This week has been a difficult week for us since the Cycles called for a short term high near Nov. 2 and a decline into November 6. Instead the Dow has rallied all week and we are now within 1 day of November 6. For most of this year those of you who have been with us awhile know the cycles have worked very well. When the Cycles called for a low most of the time we saw a low. When the Cycles called for a high most of the time we saw a high. However this week's rally,along with the technical indicators,suggest we may be seeing an inversion in the Cycles. An inversion occurs when the Cycles call for a low and instead the Dow reaches a high,or vice- versa. Inversions occur about 30% of the time. We believe we are seeing another inversion in this time frame.Instead of the Dow reaching a short term low near Nov. 6 it appears we are seeing a short term top near November 6 instead of a low. The 5-Day RSI on the Dow closed today at 91.93,the most overbought reading of the entire year.We are now much more overbought by this indicator than we were at the July 17 Bull Market high. Keep in mind the RSI cannot go above 100,and a reading above 90 is about as high as you will ever see before some sort of decline begins. Last evening we gave you a projection on the Dow calling for 9001 plus or minus 160 points intraday.That projection remains in force. The probability of a top in that area is extremely high,especially given the status of our other momentum indicators,which are still showing bearish divergence. Any decline below today's lows Friday will turn the 3-Day Chart down and confirm that some sort of top has been seen.Today's print low was 8714.91.It will take a decline below today's intraday low to truly turn the 3-Day Chart down. We will have that number for you on our 12:30 update tomorrow. In any case we do not want any of you to go short until the Dow gives some signal that a top is in. That could occur tomorrow.We will give you more specific instructions at 12:30 tomorrow.