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

To: HairBall who wrote (8155)	3/14/1999 9:03:00 PM
From: HairBall	Read Replies (2) \| Respond to of 99985

INTERSTATE 35 ROAD KILL TRADING SYSTEM – Weekend Update The following is a interpretation of my charts and my expectations of the Market as measure by the DJI (Dow Jones 30 Industrials Actual Data). My Charts can be found at: cp-tel.net RUT (Russell 2000 Index) END OF DAY CHARTS Last Friday 3/5 the RUT penetrated and closed above the longer-term resistance line. In doing so it also crossed above the centerline of it long term trading envelope. This weeks price action managed to stay above that resistance line, now acting as support and in doing so continued to trade in the upper half of it long-term trading envelope. Note that the price also remained in the lower channel of its rising short-term pitchfork The RUT did find resistance in the neighborhood of its 200 day SMA. Note, while penetrating the Bearish Rectangle it did not close above it all week. So far the bearish formation has remained valid. This formation will continue to be important and the trend lines should be watched next week. Oscillators: The medium/long term signal remains in a sell, the short/medium-term signals remains in a buy. While the short-term signal remains in a buy it is close to a sell. The Fast Stochastic is indicating that the overbought condition is getting relief with lower prices. The 200-day SMA continues to head down, while the 50-day SMA is continuing to rollover. COMPX (NASDAQ Composite) END OF DAY CHARTS Well Monday the COMPX jumped above it medium-term descending resistance line and traded above all week. In the process it continued to trade in the lower channel of its short-term rising pitchfork. In addition, the COMPX completed a rise not only above the centerline of its long-term trading channel but also rose above its 50 day SMA. All this can be seen as bullish, but it found resistance that held at the upper trend line of its Bearish Flag formation. The trend lines of this Bearish Flag will continue to be important to watch next week. Oscillators: The medium/long-term signals is still in a sell, with both the short/medium and short-term signals on sell. The Fast Stochastic is dipping below the overbought area as the COMPX repells slightly from the upper trend line, of its bearish flag. UTIL (Dow Jones 15 Utilites) END OF DAY CHARTS After last weeks rise into Friday, finding resistance at its 50-day SMA and the upper tine of the Medium-term Pitchfork, the UTIL retreated at the first of last week. It dropped below its 200 day SMA briefly finding support in the area of the lower tine of its short-term pitchfork, close to the centerline of its long-term trading envelope. From that support it launched Thursday and Friday up beyond the upper tine of it medium-term pitchfork and above its 50-day SMA. Oscillators: The medium/long-term signal remains in a sell with a Confirmation. The short/medium-term signal remains in a buy as well as does the short-term signal. The Fast Stochastic is in the overbought area. TRAN (Dow Jones 20 Transports) END OF DAY CHARTS The TRAN continued up one more day along the lower tine of its short-term Pitchfork on Monday penetrating intraday its longer-term descending resistance line, but closed below. That high on Monday completed a point that could be used to plot a new medium-term pitchfork. From there the TRAN began a pullback this week that took it below and to the left of the lower tine of its short-term pitchfork, finding support at the centerline of its long-term trading envelope. Oscillators: The medium/long-term signal remains in a sell. The short/medium-term signal remains on a sell, but the short-term signal rolled over and gave a sell signal on Wed. The Fast Stochastic has moved from the oversold area into the midrange area. DJI (Dow Jones 30 Industrials Actual Data) END OF DAY CHARTS The DJI after finding resistance last Friday 3/5, struggle around that line until thrusting past on Thursday and Friday of this week. In doing so, the DJI continued to set new record highs. Oscillators: The medium/long-term signals remains in a sell. The short/medium-term signal remains in a buy as does the short-term signal. The Fast Stochastic remained in the overbought range all week. DJI SEGMENTED DAY INDICATORS (Not ready for prime time indicators.) The DJI continues to trade in the upper half of it trading envelope. The Segmented Day Oscillator gave a sell signal at the end of the last period of Friday. The Segmented Day Stochastic has been in the overbought and the extreme overbought area since 3/5. The NYSE Advance Decline line continues to not support the move up. The Mac Summation found support and turned up a few weeks ago, but I expect it to find resistance in the next 2/4 weeks and will begin to roll back over heading down once a gain. The Mac Osc is already showing signs of resistance and the 10% it at its descending resistance line. decisionpoint.com The TRIN (OpenArms 10 Day) has moved back up into the overbought area. decisionpoint.com The Percent of NYSE Issues above their 200 day MA has shown no sign of supporting the recent records set by the DJI/IND decisionpoint.com Interest rates have begun to moderate from their retrace of the recent rise. This could signal a stall in the rise of the DJI. decisionpoint.com CONCLUSION: As I mentioned earlier in the week. The major leading Indices (COMPX & DJI) have been carried up on the shoulders of fewer and fewer stocks since the Oct 8 low. Relying on the power of a few large cap stocks coupled as of late with the Bull Market lagers, the energy issues, to bring forth the latest new high in the DJI. The most recent highs in both the DJI and COMPX were achieved while many small and mid cap issues have experienced a rotating bear market. This seems indeed to me to be a classic topping process. I suspect that DJI 10K may well be reached in the next week or two. But this is not necessary before a correction of the large cap issues that have held up the COMPX and DJI begin a correction. I expect a correction to begin within the window between late March to mid April, however, it could start any day. The Market as measured by the DJI may well test the Oct 98 lows, but I doubt this will be the “Big One'. If I am right about this correction, I will stand aside and wait for the Market to find its bottom. EDIT: Just read Peter E's report, thanks to Kip. Since I recently stopped tracking the IND (Dow 30 Industrials Theoretical Data) and converted to charting the Actual Data, I did not know that Dow 10K Theoretically had been reached...<g> (All Disclaimers Apply) BWDIK As always... Regards, LG