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

To: donald sew who wrote (7828)	3/9/1999 12:16:00 PM
From: StockOperator	Read Replies (2) \| Respond to of 99985

Donald, Robert Often times it can be difficult to explain what you're seeing on the charts without the comments themselves being misintrepreted. Because I personally track around 125 different charts on individual companies and indexes. Making comments on all those different charts can be lengthy and time consuming. Often times its easier to paint a picture of whats happening in broader strokes, just to save some time. Perhaps "do or die" was a bad way of phrasing it. Let me try again to sum up where I believe we are overall. Our recent consolidating period for the DOW has been broken to the upside. Our previous closing high on a weekly basis was 9643 from Jan 99. Last week we broke through that with a weekly close of 9736 as well as higher prices on a intraday basis as well. Despite this breakout we still have upside resistance on the DOW, because each peak in prices during this consolidating period (May 98, July 98, 1/99) was made at a higher level. It ultimately pushes our breakout to a higher level as well. The same thing applies to the S&P. Which closed yesterday exactly at the resistance line from its recent consolidation. A break here would definitely imply a major move was at hand. The RUT over the past couple of weeks has stabilized at major SUPPORT. Much more critical since a break of that support would take the index to even lower levels and would surely say negative things about the market as a whole. We are there right now. The last two day this avg. has closed near its highs (very bullish) but yet has to break through another resistance area right now. A break here, imo, should be very prominent on the charts based off the tight price range of the past couple of weeks. The NAZ which has a much shorter time frame during its recent consoldiating period - is gapping here. Which makes me nervous. Looking at its weekly chart, prices are also hitting critical resistance area. With prices closing at their highs of the week (last week) that definitely said that we should see higher prices this week even if only on a intraday basis. Which so far we have. Plus prices closed near their highs yesterday, which is also implying strength. Today of course prices are higher. The bottom line to me is how prices are going to attack this resistance that I'm seeing on the weekly chart. We are at that resistance right now. Although the transports are marching to a different beat. The same thing applies to them. They are also at a critical point on the chart. GE yesterday broke into a new high. Breaking a triple top formation. While leaving a gap unfilled on the chart from last week. Is it going to continue to rise? What about that Gap? IBM has been channeling during its most recent consolidation. Prices are currently at the upside resistance line of that channel. Is it going to break that channel? The high on JNJ was 89.75 (11/98). Prices closed yesterday at 89.06 at the highs of the day. What are they going to do here? Breakout or breakdown. I could go on and on. There are plenty more companies sitting right at major breakout pts. Besides other companies that are clearly ahead of the curve here pushing into record highs, LVLT and QWST are two. These are questions only the market can answer. And, imo, will answer here and now as it attempts to breakout. Because of the way the patterns have developed I do not believe we're going to see a nice slow moving break through these levels. I am looking for a powerful move that can only imply that this battle between the bulls and the bears is over. That move STARTED last week. The follow through is what I am interested in now. But like I said in a previous post breakouts like these are dangerous. So being cautious is warranted here. So perhaps "do or die" was a bad way of phrasing it. I do however see prices at critical points across the board. I'll let the market tell me which way it wants to go. Today's action is very encouraging in light of some of the things mentioned this morning. Good trading. SO