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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: bearshark who wrote (33501)	11/11/1998 8:53:00 AM
From: donald sew	Read Replies (2) \| Respond to of 94695

INDEX UPDATE ----------------------- There is no real change to my previous updates, which indicated that there should be some sort of dip into TUE/WED, then an upswing up into the FOMC meeting next TUE. Still feel that the following upswing into the FOMC meeting has a upside limit of 8091(lets say 8100), and should at least retest the recent highs, which is only 130 DOW points away. I am watching the XAL,TRAN,BKX carefully since they gave a hint a few days ago of weakness to follow. It is not conclusive but could be a leading indicator of weakness. As mentioned previously, these indexes did break their trendline to the downside, and if they do not recover quickly such will remain as a significant hint of weakness. The DOW was only down about 30 points yesterday with a quick selloff at the end of the day, but the market internals did hint of weakness. The NEW HIGHS closed at 45. Back in SEPT when the DOW was in the 8000-8100 range the NEW HIGHS got as high as 100+. The DOW surpassed that level by about 900 points, and still has not been able to break the 100 level on the NEW HIGHs, and no longer does the arguement that we are too far from the all-time highs hold. Also consider that the NEW HIGHS have had 1 month to improve. Keep in mind that when the market was in a strong bull run the NEW HIGHS were in the 200-300 range and got close to 400 on several occassions. The ADVANCE/DECLINE was in favor of the decliners significantly with the DOW only down 30, and the DOWN VOLUME significantly exceeded the UP VOLUME. I am watching the EUROPEAN and JAPAN markets, since I feel that they will also limit the upside of out market, since they are weaker. As previously mentioned those markets have not rebounded as strong as the U.S. market, and are still in a technical downtrend since they are still in the mode of producing LOWER LOWS AND LOWER HIGHS. I feel that those markets will do a retest of their lows within a few months and create a bottom. As they do their retest it will have negative effects and pull out market down also and limit the upside, until they develop a firm bottom(probably a DOUBLE BOTTOM FORMATION). In no way am I saying that the market will retest the lows now or soon, just that we are nearing a mid-term top(30+ days). I have not finished my research, but my initial feeling is that there will be a stronger dip that could bring the DOW into the 8500-8700 range within 2-4 weeks. If such a pullback does occur, such should be taken as a buying opportunity.