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

To: StockOperator who wrote (8008)	3/11/1999 2:57:00 PM
From: HammerHead	Read Replies (2) \| Respond to of 99985

The earnings from ORCL and NSM today will set the direction for tech stocks.

To: StockOperator who wrote (8008)	3/12/1999 12:04:00 AM
From: StockOperator	Read Replies (1) \| Respond to of 99985

There are still plenty of divergences out there. And instead of commenting on each and every chart, let me say that for every positive comment I could come up with - it would be as easy to make a negative one. So I will wait until the weekend to post a more detailed response for the week's trading as a whole. On the surface we are clearly breaking to the upside. The DOW and S&P are in record territory. The NAZ has broken through some resistance on its weekly chart. It has done so rather unremarkably. On the individual charts there is plenty of weakness in stocks. Then again there are also pockets of strength with stocks like GE and AOL hitting record highs. There are a couple of things that are bothering me here: 1. The gaps on the charts - No one knows when these gaps will be filled. There is a distinct possibility that they might not be filled for months, maybe even years. So I don't believe sitting on the sidelines, while the market takes off is the right answer. So I have to ask myself here - in light of these divergences and some of the avgs's inability to speak decisively. What can trip this bull up here (even temporarily). Which brings me to No.2. 2. Triple witching - Which is next week. We all know the kinds of volatility this can cause in the markets. What bothers me here is with the markets climbing higher THIS week. Everyone talking about 10,000. Being long the market looks like a slam dunk. And I am always leery of anything that looks too good. But yet here's the kisser. There are many charts like the RUT and AT&T that are sitting pretty close to key support areas on their charts right now. So although a downdraft on the DOW would ultimately fill the gaps on the charts. It may also cause excessive damage for the RUT and AT&T. Most likely breaking those key support areas. Of course any break could very well be temporary. Just playing mental games with some of the possibilities. The bottom line is I wouldn't want my head handed to me by the guys in the pits next week. 3. The VIX - I pointed out earlier today that there's a unfilled gap from last week. The action so far this week is pointing to a turn for this indicator. Even with the advance of the last two days for the DOW, the closing price on the VIX has also closed higher each successive day. On the weekly chart prices have already reversed. Of course this week is not over yet. So these are a couple of reasons why I believe the next week may be choppy. However let me say that it's never good to paint yourself into a corner. Because prices are sitting on key support areas on many charts. We may not see a decline on the avgs and the many unfilled gaps may indeed stay that way. Its nice to play mental gymnastics with the different scenarios. But ultimately it's the day to day action, by the market, that should guide your hand. Regards, SO