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

To: HairBall who wrote (4637)	1/24/1999 8:57:00 AM
From: donald sew	Read Replies (1) \| Respond to of 99985

INDEX UPDATE ================================= Had the chance to review many of the index: DOW - completed a lower high and retesting the previous low SPX - completed a lower high but so far a higher low OEX - completed a lower high but so far a higher low NAZ - still in an uptrend but could be forming a bear flag NDX - still in an uptrend but could be forming a bear flag BKX - appears to be a H&S, and now at right shoulder UTY - trending down and right now retesting an important low XAL - lower highs and lower low DOT - completed a lower high but retested previous low and bounced DRG - a very clear head and shoulders chart pattern RUT - formed a mini double top and yet to retest previous lows RLX - looks like a head and shoulder and now at right shoulder CYC - lower highs and lower lows FPP - lower highs and lower lows It is obvious that there is a mixed picture, but that there is a growing amount of negativity amongst the various indexes. I am growing more bearish but still feel that the next upswing is tradable but would not initiate long-term long positions. If the DOW gets that high, there will be strong resistance around 9500(based on the WEDGE/PITCHFORK senerio). As per my previous update, the DOW has 1-2 more potential down days before getting to short-term oversold extreme(CLASS BUY). If one is looking to option trade the upside soon, the NAZ,SPX,OEX and maybe the DOW stocks are the areas of more strength/less weakness. I am looking at stocks like CAT, MO, UK, DD, DIS for a upside short-term trade, since they are CLASS BUYs, low option premiums, predictable, and OK chart patterns(HIGHER HIGHs/HIGHER LOWs except MO). I will also say that I AM A LOUSEY STOCK PICKER, since I mainly play indexes, so no need to attack my selection. gggggggggg By the way, since we have been mentioning the WEDGE FORMATION, heres a good example of a WEDGE and how it broke down. TAKE a look at CAT. Connect the highs in OCT and NOV to create the upper trendline. Connent the lows in late OCT and NOV to create the lower trendline. It broke down at the beginning of DEC. Seeya

To: HairBall who wrote (4637)	1/24/1999 9:40:00 AM
From: donald sew	Read Replies (2) \| Respond to of 99985

INDEX UPDATE ============================================== There has been a growing interest in chart formations especially with the WEDGE and PITCHFORK. I mentioned in my earlier update a good example of the WEDGE as seen in CAT. CAT also has a good example of the PITCHFORK. 1) PIVOT POINT(POINT A) - use the highs near 50 on 11/5 2) Create a vector from the lows near 45 on 11/11(call it POINT B), to the highs near 52 on 12/1(call it POINT C) 3) From POINT A draw a vector that bisects VECTOR BC and call it the the MID-LINE or MAIN-LINE of the PITCHFORK 4) From both POINT B and POINT C draw vectors parralled to the MID-line You will notice that CAT dropped to 41 around the middle of DEC which intersected with the LOWER PITCHFORK TRENDLINE(VECTOR B). From that point it rebounded strongly. By the way, I also got a strong CLASS 1 BUY signal right at that time. The pitchfork doesnt work all the time, but when it does it can be used as a viable tool. I have noticed that it works better with stocks that oscilates regularly. Seeya