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

To: John Pitera who wrote (2148)	12/16/1998 11:34:00 PM
From: John Pitera	Read Replies (1) \| Respond to of 99985

Peter Eliades' Stockmarket Cycles update for Wednesday, December 16, 1998. Let's look first at the price projections. The Dow has given nominal 10 week downside projections that remain in effect through today's close, and a move above 8900 in the next day or two could invalidate those downside projections, at least temporarily. On the other hand, although we are very close to getting downside projections on the New York Composite and the S&P 500, they have not been given as yet, so we have no high confidence sense of direction for the very short term here. We continue to be fascinated by the fact that the monthly Coppock Curve on the S&P is going to a multi-year low and breaking important support even as the price of the S&P went to a new all time high monthly close at the end of November. It is hard to conceive that that is giving anything but a very bearish signal. We should say, however, that we were somewhat surprised today when we updated our daily equivalent of the monthly Coppock chart on the S&P. The basic difference in the calculation is that the monthly uses monthly weighted moving averages for the final calculation, whereas the daily uses exponential moving averages for the Coppock equivalent readings. On our update today we discovered that the daily equivalent has not broken below the prior support ledge that we have talked about in showing you in a recent newsletter. That ledge was formed in late 1996 and again in mid-1997. Perhaps a big market break will not occur until that ledge is broken on the daily chart and for that reason we will keep you posted on its progress. Today at the close the daily Coppock closed at 45.88. The late 1990 low was 45.41 and the mid-1997 low was 45.33. Another decline of 2-4% would probably succeed in forcing the daily Coppock on the S&P below that potentially very important support level. At the same time we must remind you that we still face the possibility of seeing a repeat of the May-June 1990 and November-December 1972 scenario where there was one more high left in the market. We, in fact, do not look for that to occur, but because of the similarities in the indicators at that time, we cannot rule it out. Mutual fund switchers, Rydex switchers are in Ursa. Fidelity Select switchers are in cash. All mutual fund switchers should call each market afternoon after 3:20 p.m. and each market evening. Stock Index futures traders, there were no trades triggered today. Tomorrow attempt to sell short the March S&P at 1179.90 market if touched or higher if they open higher, but our stop on the trade is going to be a close stop at 1183.90 and we do not want you to short if the day's session opens above that level. If that price is unavailable, or if prices open above the 1183.90 level and start pulling back, we want you to sell on a move below 1163.70 with a stop at 1169.90. There are no new projections on bonds and the XAU. Have a great day. We'll talk to you tomorrow.