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

To: brian z who wrote (5473)2/5/1999 12:07:00 AM
From: StockOperator  Respond to of 99985
 
Brian Z,

Absolutley, also in light of the trannies closing higher today. Of course today's action could be a warning of things to come. But any damage should always be viewed in the context of the long term trend. If of course that's where your analysis is directed. MDA can be many things to many people.

SO



To: brian z who wrote (5473)2/5/1999 12:31:00 AM
From: Smooth Drive  Read Replies (2) | Respond to of 99985
 
Good Evening All,

THROUGH MY ROSE TINTED GLASSES

The DOW INDUSTRIALS closed down 62.31 points or .67%, but still up 23.17 points or .25% from last week. The TRANSPORTS closed up 21.8 points or .68% and up 168.81 points or 5.48% for the week. The UTILITIES closed down 3.66 points or 1.24% and down 11.9 points or 3.92% from one week ago. The S&P 500 closed down 23.58 points or 1.85% and the NAZ was down 83.34 points at 3.34% and down 67.27 points or 2.72% for the week.

OVERBOUGHT/OVERSOLD (OB/OS)

This is a daily calculated OB/OS indicator spliced together with masking tape and my understanding of how Birinyi calculates his. It uses a 50 DEMA and looks back one year at the highest and lowest, as a percent, that a stock or index has traded above or below its 50 DEMA. Thus, creating a so called range of OB/OS. (Also listed are a few moving averages.)

			50		OVER	OVER
INDEX	CLOSE	BOTTOM	DEMA	TOP	SOLD	BOUGHT
						
DJIA	9304.50	7809.86	9155.80	10051.8	0.00%	16.59%
DJTA	3247.14	2452.84	3095.85	3523.51	0.00%	35.38%
DJUA	291.29	286.72	305.22	337.33	75.32%	0.00%
NYSE	591.05	498.67	582.81	628.03	0.00%	18.22%
S&P	1248.49	1044.12	1214.81	1323.44	0.00%	31.00%
NAZ	2410.07	1767.21	2225.12	2611.98	0.00%	47.81%

	52	52					
	WEEK	WEEK		5	13	40	50
INDEX	LOW	HIGH	CLOSE	DEMA	DEMA	DEMA	DEMA
							
DJIA	7379.70	9759.44	9304.50	9314.97	9304.44	9207.21	9155.80
DJTA	2260.24	3735.38	3247.14	3213.28	3179.03	3117.01	3095.85
DJUA	260.89	323.65	291.29	295.84	300.63	305.05	305.22
NYSE	462.69	612.20	591.05	594.43	593.75	586.49	582.81
S&P	923.32	1283.75	1248.49	1260.38	1255.33	1226.44	1214.81
NAZ	1343.87	2533.44	2410.07	2454.02	2423.56	2273.07	2225.12

TONIGHT'S CHART

I keep two different box size point and figure hand charts on the DJUA. It amazes me how this chart, over many years, is such a good leading indicator of the DJIA. It's tops and bottoms are ahead from weeks to months.

Here's a portion of the DJUA using a 2 X 6 box system (2 points per box, and a 3 box reversal requirement).

322 X
320 X O
318 X O
316 X O X           *
314 X O X O         X *
312 X O X O     X   X O *
310 X O X O     X O C O   * < Unofficial Bearish Res Line
308 A O X O     X O X 1 X
306 X O X O     X O X O X O
304 X O X O X   B O   O X O
302 X O X O X O X *   O   O
300 X O   O X O X   *     O < Double Bottom Sell Signal
298 X *   O   O       *   2
296 X   *               * O
294 X     *               O 
292 X       *             O * < Bearish Support Line
290 X         *         + < Official Bullish Support Line
288 X           *     +  
286 X             * +  
284 X             + *
282 X           +     *
280 X         +         *
278 X       +             * < Bearish Support Line
276 X     +  
274 X   +  
272 X +  
270 +

Two double bottom sell signals in a row and no support from the Bearish Support Line at 294. Could also be considered a descending triple bottom sell signal (the bottom O at 304, the next bottom O at 302 and then last column when it hit 300).

This chart is long term bullish (trading above the Bullish Support Line) and short term bearish (on a sell signal). Today's action placed an O right on the Bullish Support Line at 292. If it drops to 290, then it will penetrate the "Official" Bullish Support Line, and the "Unofficial" Bearish Resistance Line will become "Official". This would change the chart to long term bearish. (Fact is, the Bearish Resistance Line is clearly in charge right now.) Of more importance, this Bullish Support Line has not been penetrated in years.

The first vertical price objective is 314-((6*2)*2)=290, and the second vertical price objective is 314-((6*3)*2)=278.

A few of our most important indicators as follows:


                        02/02/99          01/26/99
% NYSE > 10 Week MA        39.81             42.48 Bear Confirmed
% OPTs > 10 Week MA        43.1              43.8  Bear Confirmed
% NYSE > 30 Week MA        43.33             44.85 Bear Confirmed
NYSE Bullish %             50.0              52.0  Bear Confirmed
OPT Stks Bullish %         56.0              59.1  Bear Confirmed
NYSE High Low Index        46.1              49.2

As I live and die by my P&F charts, I'm now long term bearish and short term bearish, and trade/invest accordingly.

Take care,

Eric


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