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

To: Monty Lenard who wrote (4577)	1/22/1999 8:24:00 PM
From: Vitas	Read Replies (1) \| Respond to of 99985

Hi Monty, Would it be possible for you to post a similar chart for the New York Composite? Thanks, Vitas

To: Monty Lenard who wrote (4577)	1/22/1999 10:09:00 PM
From: Haim R. Branisteanu	Read Replies (1) \| Respond to of 99985

Monty, on your charts try to go by the closing prices and you will get a different picture. If you if you start Oct 9,(leave the OCt 8 low out) the trend line is completely different. I am not sure that a semi log chart is accurate. An inflation adjusted chart should do it. Haim

To: Monty Lenard who wrote (4577)	1/23/1999 7:56:00 AM
From: donald sew	Read Replies (2) \| Respond to of 99985

INDEX UPDATE =============================== Firstly, I want to thank MONTY for making available the charts showing the WEDGE and PITCHFORK patterns. personal.msy.bellsouth.net The DOW is now clearly below the LOWER TRENDLINE of the WEDGE, and such is also the main trendline from the OCT lows. This trendline now becomes the resistance line to the upside. It now appears that the DOW could possibly be heading towards the MIDDLE LINE of the PITCHFORK. Also notice that the PITCHFORK is declining, and should contain the trading range of the DOW. Per MONTY's chart the junction of the UPPER TRENDLINE of the PITCHFORK and the LOWER TRENDLINE of the WEDGE is around 9500 and will occur in approximately 5-6 trading days. My position is that unless we exceed 9500 significantly by that junction point(5-6 days from now), such would be one confirmation that we are heading lower. Now I will tie that into my SHORT-TERM analysis. As of FRIDAY's close I have a weak CLASS 2 BUY signal on the DOW and the rest of the major indexes are in the LOWER MID-RANGE approaching OVERSOLD region. Please keep in mind that my CLASS BUY signals are the extremes within the OVERSOLD region. This implies that there is approximately 1-2 more potential down days for the DOW and 2-3 more potential down days for the other major indexes. This does not mean that the market could not reverse to the upside on MONDAY, just that there is 1-2 more potential down days before the DOW gets to extreme BUY territory. OK - so, if the market continues down 1-3 more days, it should reverse back up around TUE/WED. That only gives about 2-3 days before the junction of the WEDGE and PITCHFORK. Please understand that my analysis is mainly based on TIME not price movement, so a 2-3 day upswing implies that it may not be that strong and less of a chance to set new highs in the next short-term cycle. This is more on the subjective side. Since the DOW hit the peak at 9650 there has been 9 trading days, with 7 down and only 2 up. That does not mean much by itself, since the same thing happened from the end of NOV to mid-DEC, before the DOW took off to set a new high. However, at that time we did not get a DECLINING PITCHFORK, which we have now. I fully realise that there are funds on the sidelines, but the question is when will it come into the market - its an abstract as far as I know. Has anyone attempted to apply technical analysis to money flow. I will not underestimate it, but unfortunately I am unable to analytically analyze that. So I can not say that there is no chance of the DOW setting NEW HIGHS. In light of DOW staying within the DECLINING PITCHFORK, I am leaning towards more bearishness. However if that UPPER TRENDLINE of the PITCHFORK is pierced to the upside, take caution for those who are on the short-side. Once I do get my CLASS 1 BUY signal I will probably trade to the upside, but that is only TRADING. My long-term funds will stay on the sidelines or hedged. Seeya