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

To: HairBall who wrote (699)	12/7/1998 12:28:00 AM
From: Smooth Drive	Read Replies (1) \| Respond to of 99985

Hello LG, I've found that from a point and figure perspective, the Dow Jones Utility Average is somewhat of a leading indicator for its big brother the DJIA. Here's a little dash of some of the Utility Average's recent action: 322 X + < Bullish Resistance Line 320 X X O + 318 X O X O X + 316 X O X O X O + 314 X O O X O + * 312 X O X O + X X X X * 310 X O X O + X O X O X O X O * 308 X O X O + X O X O X O X O X * 306 X O X O + X O X O X O + O X * < Bearish Resistance 304 X O X O X X O O + + O X Line 302 O X O X O X X * + O 300 O O X O X O X + 298 O X O X O X + * 296 Bullish O O O + * 294 Support Line > + * 292 * 290 * 288 * < Bearish Support Line 1 1 1 1 1 1 1 1 1 1 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 A few key signals with dates in coordinate grid form as follows: Double Top Buy Signal at 3,322,10/07/98; Double Bottom Sell Signal at 4,312,10/09/98; Double Bottom Sell Signal at 6,298,10/20/98; Double Top Buy Signal at 11,304,11/02/98; and the last Double Bottom Sell Signal at 18,304,11/30/98. You can see the recent sideways movement and strong horizontal resistance at 312. You can also see that the Bullish Support Line (BSL) was penetrated and taken out with the sell signal at 304, which established a new Bearish Resistance Line (BRL) starting at 314. The BSL was in play for a very long time and the fact that it was taken out could be considered very bearish. (However, if the index can rise to 314, it will break through the BRL and old horizontal resistance and once again establish a new BSL.) This chart is now considered long term bearish (below its Bearish Resistance Line) and short term bearish (on a sell signal). Strong horizontal support in the 296 area and a Bearish Support Line (bsl) at 288. As time permits I'll keep this chart updated and add the DJIA and Transportation Average. Take care, Eric