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

To: HairBall who wrote (5492)	2/5/1999 8:54:00 AM
From: John Pitera	Respond to of 99985

LG, in keeping with the thread's theme of everyone emotionally running to one side of the boat<<<G>>> Peter E...still sees a vulnerable mkt. Although he like Favors knows it can stretch out until April 6th. John Peter Eliades' Stockmarket Cycles update for Thursday, February 4, 1999. The analysis remains basically unchanged. Today with the S&P 500 Index within 1% of the all time high at the high of the day, the daily advance-decline line traded at its lowest level since October 20,. That is over three months ago and just eight market days after the climactic October low of last year. On Friday of last week, the S&P Cash closes at a new all time high. It was accompanied by a ratio adjusted McClellan Oscillator of 15.8 and a ratio adjusted McClellan Summation Index of 191.7. We did our old reliable historic search again to determine if the S&P was ever before accompanied with such poor breadth readings as it reached an all time high close. Those figures cover the past 73 or 74 years and the answer is, there was one other day in the past 73 years when such a coincidence occurred, July 31, 1929, so we have found another technical pointer that refers back to 1929. Mind you, there is not much comfort in that July 31 date for bears because after a one to two week consolidation back then, the Dow went on to rally a final 10% before the September 3 top. It is another reason why we cannot be overconfident as yet that the top is in. There are many technical suggestions that it could indeed have been seen on already, but here are also analogues such as the one above that suggests the madness could have several weeks left. One good starting point for analysis is suggested by our 108-109 week cycle, the time window for its resolution was between December 24 and February 4. That's today. The highest Dow high in that time period was 9647.96 on an actual print basis. That occurred on January 8. The lowest low in that time window was 9063.26 on January 25. We believe whichever of those high or lows is violated first will identify the other one as the resolution of the 108-109 week cycle, whether it is a top or a bottom. A move above the January 8 high, for example, would now suggest even further madness to the upside for at least a few more weeks and it would suggest that we had seen a cycle bottom on January 25. On the other hand, a move below the January 25 low, would suggest the January 8 would end up being an important top. Mutual funds switchers, Rydex switchers are in the Rydex Ursa fund. Fidelity Select switchers are in cash. All mutual fund switchers should call for the possibility of a special update after 3:20 p.m. ET and should call each market evening. Stock Index Futures traders, you are short the March S&P. Place your initial stops at 1285.60. If you are stopped out, you may reshort on a move below 1271.00 with a stop 1.50 above the high at the time of the short sale. The XAU gave a nominal 20 day projection up to 69.10 +- $1.00 and that could lead to higher projections. March bonds project to 123 ½ and that could lead to even lower projections depending on if and when it is met. That's it for now. Have a great day. We'll talk to you tomorrow.