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

To: Gersh Avery who wrote (1780)	12/14/1998 7:20:00 PM
From: dennis michael patterson	Read Replies (5) \| Respond to of 99985

Jerry Favors Analysis - Monday, December 14, 1998 8 p.m. At the lows today the Dow was down over 145 points. We closed down 126.16 points. We stated last evening that the sentiment readings from the Put/Call Ratio on the CBOE suggested that lower prices were likely in this time frame,at least short term. That was certainly the case today.Our work still allows for lower prices tomorrow but according to the Cycles and the Bradley indicator we should be near some sort of short term low already. The next Bradley turning point is December 11 plis or minus 2 trading days and the Cycles suggest that a low should be seen by December 11 to December 15. There is one more day left in the Cycles and in the Bradley for a potential short term low. This means we should see some sort of short term low tomorrow. The 5-Day RSI closed at 17.99,the most oversold reading since August 31, the closing low for the July to August "mini-crash". We should be near the next low in the Dow in terms of time. That low should be seen by tomorrow ,December 15 . The Cycles should then turn up into December 22 plus or minus 1 day. However we could still see a fairly strong decline tomorrow before the low comes in. The key support for tomorrow will be 8573 intraday in the Dow. If the Dow falls below that level it will signal lower prices, because the Gann Monthly Chart will turn down. That will be a potential problem for us but it would not in and of itself prove the Bull Market is over. In fact if the Dow falls below 8573 intraday and then later rises back above 9459 intraday it would be a very strong signal that much higher prices are coming into March or April of next year before any serious top. Nevertheless we must keep our stops in place just in case we are wrong and a major top has already been seen. Tuesday will be another important day so we will put on another interim update at 3:15 EST with new instructions.