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

To: The Perfect Hedge who wrote (3073)	12/29/1998 7:59:00 PM
From: bobby beara	Read Replies (1) \| Respond to of 99985

B. YEP I'm NUTZ, I covered 2/3rds today, my target is for support is 55. >>>>No.You NUTZ.SCH is going to blowup fundamentally.<<< What are your reasons? bb

To: The Perfect Hedge who wrote (3073)	12/29/1998 8:21:00 PM
From: dennis michael patterson	Respond to of 99985

Jerry Favors Analysis - Tuesday, December 29, 1998 8 p.m. At the lows this morning the Dow was down almost 40 points. The Dow then turned up and at the highs the Dow was up as much as 108.13 points. We closed up 94.23. Today's action suggests the Dow will likely test the prior all time highs into a probable top near Monday, January 4 plus or minus 2 trading days. The upper price projection we gave last week calls for 9412 plus or minus 80 points intraday for the Dow. As long as the Dow holds above 9187 on a print basis from here we must assume the Dow will test the prior all time highs of 9380 on a print basis, 9374.27 on a closing basis and 9458 intraday. The "Santa Claus Rally" we discussed last week and last evening seems to be winning over the cycles in this time frame. The "Santa Claus Rally" normally takes place during the last week of December and lasts until the first 1 or 2 days of January. The normal "Santa Claus Rally" does not always last until the first 1 or 2 days of January but often is very close. Our point here is that we should not necessarily expect the rally to last into the first 1 or 2 days of January. It may but we are not going to count on that. The next important change in trend is due near January 4 plus or minus 2 trading days, and because of the holiday we will enter that time frame tomorrow. So we must be alert for a probable high within the next 1 to 4 trading days. The 10-Day Trading Index closed below 0.80 today,which suggests we are near some sort of high. We discussed the 10- Day Trin last evening. The Trin-5 is still below 4.00, which also suggests we are near some sort of high. The 5-Day RSI closed at 86.94. Most tops will occur when the 5-Day RSI reaches the 70 to 80 area,so 86.94 is an extreme reading. At the November 23 closing high the 5-Day RSI reached 92.92. However readings above 90 in the 5-Day RSI do not occur that often and it is not necessary for the 5-Day RSI to exceed 90 for a top in this time frame. We are well into the danger zone right now. We want to continue to give the upside the benefit of the doubt alittle longer. But remember if the Dow reaches new highs within the next 1 to 4 trading days we will be selling our remaining long positions for stock traders and mutual fund switchers. We will issue a sell signal in the next 1 to 4 market days if the Dow rallies to new highs. For Wednesday morning any decline below 9310.42 on a print basis in the first full hour of trading will signal a further pullback,but as long as any pullback holds above 9187 no sell signal would be given. There is some resistance to any rally tomorrow near 9380 plus or minus 30 points in the Dow. However there is a good chance that the NYSE cash index will exceed 601.76 before topping. If the NYSE cash index were to exceed 601.76 and the Dow were to rally a similar percentage the Dow would exceed 9393 on a print basis. Stock traders and mutual fund switchers remain long for now. Short term option traders we will be giving you a signal to go short,by which we mean go long puts with at least 2 months to go before expiration, within the next 1 to 4 market days.