Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: dennis michael patterson who wrote (2395)	12/20/1998 6:49:00 PM
From: dennis michael patterson	Read Replies (3) \| Respond to of 99985

Favors tonight. There is eomthig for everyone: Our cycles suggest a probable high near December 22 plus or minus 2 trading days. Now we have stated before the Dow normally reaches some sort of short term high or low near each options expiration day, plus or minus 2 days. The Bradley shows 2 turning points for this time frame. Those are December 18 plus or minus 2 days and December 22 plus or minus 2 days.Given Friday's rally we believe we could see a short term sell-off for a day or so beginning sometime Monday. Any decline below 8858 on a print basis in the Dow will give a short term negative signal from the hourly charts. This would suggest lower prices Monday. However if so any decline should be a brief one and should be followed by another rally into December 22 plus or minus 2 trading days. There is a Lindsay Top-to-Top Count from the August 31 closing low calling for some sort of high between here and December 23. After the high due near December 22 plus or minus 2 days the cycles turn down into a low due near the end of December. Actually the low is due near Monday,January 4 plus or minus 2 trading days. That will be the next trading day after December 31. While the Cycles call for a high this coming week and a decline into the last week of December we should tell you there is a seasonal pattern called the "Santa Claus Rally" which argues for a rally in the last week of December. According to the well known market analyst Yale Hirsch,in his book Stock Traders Alamanac," Santa Claus comes to Wall Street nearly every year and brings a short, sweet, respectable rally. In the past 45 years he failed to appear only in 1955, 1966, 1968, 1977, 1979, 1981, 1984,1990,1992 and 1993. The rally occurs within the last 5 days of the year and the first 2 of January." Hirsch goes on to state "The Bear Markets of 1957, 1962, 1966, 1969, and 1977 were not preceded by Santa Claus rallies. Seven other lackluster periods preceded years when stocks could have been purchased at much lower prices later in the year." This so called "Santa Claus Rally" has been so consistent,occurring over 77% of the time over the last 45 years,that it has lead to the saying," If Santa Claus should fail to call,Bears may come to Broad and Wall". This means that if we do not see a "Santa Claus Rally " this year it could prove bearish for 1999. So we have the Cycles calling for a high near December 22 plus or minus 2 days and then a decline into the end of December,while the Santa Claus rally phenomenon calls for a rally during the last week of December into the first 1 or 2 days of January. Clearly one of the two will be wrong. If the cycles prove accurate it will be a bearish signal for 1999. For this week any rally above 9012.30 intraday in the Dow will turn the Gann Weekly Chart up and signal higher prices. If the Dow exceeds 8928.60 on a print basis we will probably exceed 9012.30 intraday. If the March S&P futures exceed 1202.30 or if the NYSE cash index exceeds 572.54 the odds will be high that the Dow will exceed 9012.30 intraday. Any decline below 8858 on a print basis Monday will signal lower prices and give a short term sell signal from the hourly charts. Any decline below 8901 on a print basis in the first full hour of trading Monday morning could lead to a test of 8858. We have had several calls about our Gann Trend Change Dates, which we did not have time to put in our last newsletter. For those of you who follow those Trend Change Dates the next Gann Trend Change Dates are: December 23 plus or minus 1 day January 4 plus or minus 1 day January 13 plus or minus 1 day January 21 plus or minus 1 day This report strikes me as worse than useles. He seems to be saying that anything can happen. Am I being unfair?

To: dennis michael patterson who wrote (2395)	12/20/1998 6:51:00 PM
From: StockOperator	Read Replies (2) \| Respond to of 99985

Dennis, I agree with you. Like I have been saying for the past two weeks on this thread, the charts looks bullish. I can't go short the market when the charts that make up the major averages are all breaking out of bullish patterns. Granted tomorrow could be an interesting day, however I believe that the path of least resistance has been established, and that up. My style of trading is strictly technical so I don't dive into the fundamentals much but I would throw this out to all of you,,, Is this market truly overvalued? We hear everyday just how pricey this market is, and we buy into that,,, and if it is as expensive as everyone claims, what continues to drive it higher. I've giving this alot of thought lately and maybe its a possibility that were not as overvalued as the experts claim. Look at the S&P, NAZ which are so heavily overweighted by just a handful of stocks; Is it fair to say that the overall market is too high just because a handful of stocks in the major indices are at high multiples. What about the small and midcap stocks that have been relatively quiet for such a long time, and are historically cheap, if this market broadens out wouldn't that be a huge positive for the life of this bull market? Besides, the stocks that are at trading at such high multiples are the ones that are growing at the fastest rate (excluding internuts) which is somewhat justified. So if the baby boomers are in the peak of their earning years and will be pumping billions of dollars into the markets over the next ten years, just how overvalued can we get? Anyone have an opinion on this, I would really enjoy reading them. Thanks. StockOperator