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

To: Arik T.G. who wrote (4746)	1/27/1999 4:54:00 PM
From: donald sew	Read Replies (3) \| Respond to of 99985

INDEX UPDATE ====================================== Yesterday the market we up over 100 points and the the BULLs come out and we heard emotional statements that we are going straight up. Today we are down over 100 points and we may hear the reverse from the bears. I may sound cynical to some, but I want to highlight it since I strongly feel emotional trading can hurt. Im sure that there are a few emotional traders who do well, but Im sure that there are only a few of them, but the majority of emotional traders probably lose. Frankly, I didnt have a clue what would happen today since my short-term technicals were smack in the middle, and as I have stated over and over that when they are in the mid-range its a flip of the coin. I still feel that the WEDGE and PITCHFORK will keep the DOW from setting new highs for the mid-term(30days). Please keep in mind that the juction of the WEDGE/PITCHFORK is near FRIDAY at about 9500. I was hoping that we would get 2-3 more up days to bring us close to 9500. As long as we would not break the PITCHFORK to the upside(9500 range), it would make it easier for me to pull the trigger. Now the decision becomes tougher. Will the market now head straight down from the mid-range of the technicals, or do we bounce up again. Are we now getting a STAIR-STEP where we just continue ZIG-ZAGGING with significant volitility for a few more days. If we do ZIG-ZAG I will wait to initiate PUTs again on MON/TUE/WED in light of the END of MONTH RALLY/Window dressing and the timing of the WEDGE/PITCHFORK. To further explain, if we just ZIG-ZAG I will not get a CLASS SELL signal per my system so it makes the decision to pull the trigger tougher. The DOW would have to get close to 9500 to give a CLASS SELL signal, which is now getting less likely. If we break below 9050 it would imply a LOWER LOW and that a mid-term downtrend is in process. If we break above the PITCHFORK around 9500, such would imply we are heading higher. At this time I am growing more bearish. It was interesting today to hear the analyst from MERILL on CNBC calling for negativity and that we could head back down below 8000 shortly. Hey, of course he could be wrong, but I would not want to underestimate or totally discount the influence that Merril can have on the market. That should at least get some of the BULLs thinking. Seeya