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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: James Strauss who wrote (614)	12/6/1998 5:04:00 PM
From: HairBall	Read Replies (2) \| Respond to of 99985

WEEKEND ANALYSIS (I-35 Road Kill Trading System) I decided to forgo the usual silly formation dialog and go right into some serious analysis, as the Cowboys lost again and I am not a happy camper...<g> END OF DAY ANALYSIS Note: End of Day Data for Dow Indices is Theoretical. All charts are Semi-Log. Oscillator Indicators Signal Descriptions A Signal: Short Term (Buy/Sell) B Signal: Short/Medium Term (Buy/Sell) C Signal: Medium/Long Term (Buy/Sell) D Confirmation: Long Term (Buy/Sell) NYSE Advance/Decline Short Term Indicators Signal Descriptions X Signal: Alert (Buy/Sell) Y Signal: Signal (Buy/Sell) Last Signal per Indicator per Indice Dow Composite A) Sell 11/30 B) Sell 12/04 C) Buy 10/21 D) Sell 08/20 Note: A/B down momentum slowing and could reverse direction soon. D bottomed on 10/21 and continues to rise toward a buy signal. The 21-day weighted MA has been rising but is loosing momentum and appears to be leveling off. Dow Industrials - IND A) Sell 11/30 B) Sell 12/03 C) Buy 10/20 D) Sell 08/31 Note: A/B downward momentum is slowing and could reverse soon. D bottomed on 10/20 and is continuing to rise toward a buy signal. The 21-day weighted MA is trying to roll over. The Industrials found support Thursday and Friday in the area of the lower band of its long term trading channel the 21 day weighted moving envelope with 2.75 vertical shift. This trading channel is indicating a slowing of momentum and a trending towards a sideways trading channel at least short-term. Dow Transports - TRAN A) Sell 12/01 B) Buy 10/16 C) Buy 10/30 D) Sell 07/29 Note: D bottomed on 10/30 and continues to rise toward a buy signal. Dow Utilities - UTIL A) Sell 11/25 B) Sell 12/01 C) Buy 09/08 D) Buy 07/28/97 Note: A is close to giving a buy. NYSE Composite - NYA A) Sell 11/30 B) Buy 10/16 C) Buy 10/26 D) Sell 08/31 Note: D bottomed on 10/26 and continues to rise toward a buy signal. NYSE Advance/Decline Indicator X) Buy Alert 12/04 Y) Sell Signal 11/30 NASDAQ Composite A) Sell 11/30 B) Buy 10/19 C) Buy 10/30 D) Sell 09/09 Note: A is trying to turn up. D bottomed on 10/30 and is rising toward a buy signal. Russell 2000 - RUT A) Sell 12/02 B) Buy 1//20 C) Buy 10/26 D) Sell 07/28 Note: A could be near a buy signal. B is floating just above possible sell signal. D bottomed on 10/26 and has continued to rise toward a buy signal. Standard & Poors 500 - SPX A) Sell 11/30 B) Buy 10/15 C) Buy 10/29 D) Sell 09/09 Note: A's down momentum is slowing. B is hovering above a sell signal. D is very close to giving a buy signal. The 50-day SMA is very close to rising above the 200-day SMA. NOTE: I may not post the Indicator's Signals again per Indice. I fear it is to hard for readers to interpret if you can not visually see the charts. In addition, these Indicators must be interpreted as a whole for a complete read of each Indice and the Market as a whole. It would be better if I displayed them graphically, but to date, I have been too lazy and too busy to start a web page to display them, sorry! Let me know if is worth the effort to continue to post the individual signals again, as done above! End of Day Charting Formation Analysis IND Noting Doug R's charting for the Dow Industrials “real money” selling points at the highs of 8/19 and 10/20 and his “real money” buying points at the lows of 9/1 and 9/10, extend for trend lines. In addition he mentioned the last consolidation of the rally before the latest peek. The descending trend line at the highs of 11/16 and 11/13. Many who have read my post over on the TSO thread know I referred to the later as a Bull Flag. However, after reading Doug R's analysis, I drew the trend lines and they went off my printed chart trying to find his “real money” intersection for a direction decision point. I must say I find this very interesting. But I will leave the complete interpretation of his work for him to explain. I for one would like here it. I did note in doing the extension of the last Bull Flag's upper descending trend line that when extended it acted as support for the lows on Thursday. I believe this is the top of an inverted flag poll, which bottom began at the highs of 11/27. This bearish formation, which I believe is forming, has not revealed if it is going to be a pennant or flag. Both formations would portend consolidation and then a break to the downside. This would lend some support to Donald Sew's expectation of a stair step into the 9100/9200 range. I must note an earlier post of HiTech's on the TSO thread to Donald of which I entered the discussion. It was about a rising wedge pattern. To view the upper ascending trend line, connect the highs of 10/20 and 11/6 and extend. To view the lower ascending trend line, connect the lows of 10/8 and 11/18-19 and extend. The break to the norm of this pattern would be to the down side. And, it did break to the down side on 12/30. However, for this pattern to completely resolve, the Dow would have to drop below the 10/8 low. That would be some resolution. Something to keep and eye on. Note: The SPX and NYA also had a similar rising wedge which broke to the down side on 12/30 as well. The SPX has currently formed a descending triangle, which as does the IND's possible Bear Pennant/Flag formation, portends a move to the down side. The NASDAQ continues to find support along its rising trend line. To view this trend line, connect the lows of 10/8 and 11/18 and extend. However, the NAZ is definitely showing signs of loosing momentum, which could support the downturn of the IND, SPX and NYA. No clear chart formation at this time. The RUT's upward momentum has shifted its trading channel into a sideways movement. No clear formation at this time. End of Day Analysis Conclusion I suspect the Market as measured by the Dow Industrials (IND) will consolidate for the next few days and then most likely will break to the down side. However note, these formations can break to the norm at any given time. I should have a better read after the IND's formation becomes more clear. INTRADAY ANALYSIS Charts: Intraday Actual 60-Minute Interval Semi-Log The DJI, NYA and SPX all broke above their respective upper descending trend lines Friday. The DJI initially has formed a Bearish Pennant. As we have seen in the past, it could well morph into a Bearish Flag. However, both formations portend a consolidation and then a continuation of the trend that they formed from, which would be down. This also lends support to Donald's stair step to 9100/9200 The NASDAQ and the RUT both seem to be trading in symmetrical triangles. Of which the normal break would be to the upside. Note: All chart formations are not 100%! Intraday Analysis Conclusion The Market as measured by DJI will most likely have a brief consolidating pullback and then return to trending down in a few days, if not sooner. The NAZ and the RUT are signaling a divergence, which seems to be the case as of late. I have no definitive read on this divergence. (All Disclaimers Apply) BWDIK Regards, LG