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To: Chris who wrote (58170)	12/1/1998 9:23:00 AM
From: HairBall	Respond to of 58727

Chris: No offense, but your SPX chart is missing a very important trend line...the ascending support trend line starting at the low of Oct 8th. And, it was violated yesterday, as were the same trend lines for the IND/DJI, TRANS and NYA! Regards, LG

To: Chris who wrote (58170)	12/1/1998 9:27:00 AM
From: donald sew	Read Replies (3) \| Respond to of 58727

INDEX UPDATE ================================ Yesterday, I heard briefly on CNBC that U.S.CLEARING is increasing their margin requirements, and that other firms will be following suit. I did not get the details. Can anyone help out with the details? As mentioned earlier, yesterday's selloff was much stronger than I had expected. This is not to say that we are heading straight down, just that I now feel that such a strong selloff is a technical sign of greater weakness and quicker weakening than I had originally expected. It appears that we could get close to the 5% pullback which was projected, again quicker than expected. However I still feel the key is the following rebound. If the following rebound cannot exceed the previous highs of 9375, such will form a DOUBLE TOP or LOWER HIGH which would confirm further weakness. I also expressed the possibility of another STAIRSTEP process, where there is basicly no significant rebound but flatness near the lows of this pullback. So lets say we get to the 9000 range and only oscillate near 9000 not getting back to the 9300-9400 range. If that occurs, that would be a strong signal of further downward movement. If a STAIRSTEP occurs it could take the form of a RECTANGLE, WEDGE, PENNANT which would have a bearish indications since the norm is for such formations to take the direction of the immediate trend. The only sign of strength/less weakness that I could find yesterday was that the RUT did not sell off as much as the other major indexes. We should not underestimate the RUT, since it does consist of 2000 stocks. From preliminary calculations, my short-term system will be giving off at least a CLASS 2 BUY SIGNAL, could be a CLASS 1, if the DOW hits 9000 today or tomorrow. Peviously, I mentioned that I got a CLASS 1 SELL SIGNAL for yesterday, but also had a short-term cycle top to occur between DEC 2,3,4(WED,THU,FRI) which now may be negated in light of the quickness and size of this pullback. Firstly, feel that the support at the 9000 area is very strong and it should hold. If 9000 doesnt hold the next significant support is in the 8750-8800 range. If 9000 range holds then there are 3 possibilities: 1) retest of the highs at 9375 or a lower high 2) new highs above 9375 3) STAIRSTEP developing. Although I feel the market is weakening, I do feel that the BUBBLE is still here, just weakened a bit. I will not eliminate the possibility of new highs but feel that the DOW will not get anywhere close to 10000 by the end of the year. If new highs are made, not that I am that confident that new highs will be set, I feel the upside limit is in the 9550 range. seeya