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

To: Gersh Avery who wrote (8585)	3/21/1999 9:19:00 AM
From: donald sew	Read Replies (2) \| Respond to of 99985

INDEX UPDATE ========================================== Firstly, a comment to GERSH. Thats spooky, it looks like you have a pretty good understanding of my system, and frankly I think your explanation is better than mine at times. So for those who are interested in understanding my system, please refer to GERSH's post. Message 8434660 I went back to check my statistics, and if the 3rd day after selling starts is a strong selling day, which commonly it can be, then more selling will continue in the 4th/5th days, which confirms Gersh's observation. So here is some logic - if the 3rd day is not a big selling day then it could mean that the market could pop to the upside from there or go flat/zig-zag. The 2nd day is not commonly a big selling day, and could even be slightly up. Since the reversal was early, that does imply that this could be a strong pullback. On a more subjective view, I am suspecting that the DOW could pull back to the 9600-9750 range rather quickly, then zig-zag there forming a STAIR-STEP. If that were to happen, that would be similar to what happened after last JULY 20th peak, when the DOW dropped from 9300 to 9000. That zig-zag pattern could have a slight incline to it, and could last about one week, which would bring us into early April, when the stronger selling starts. In this senerio my short-term technicals would drop to the mid-range and oscilate there and make one last pop towards the overbought range, then drop hard. The other senerio is that we pull-back steadily and strongly some 400-600 DOW points next week, then the following week we move back up into early APRIL, before the stronger selling starts. In both the above senerios, the DOW does not break back above 10,000 with both forming LOWER HIGHs. At this time, Im leaning more towards the 1st senerio, but as mentioned earlier a possible key is how hard we sell off on the 3rd day(TUEs). I believe the 9-month cycle top(2/3rd point) arrives on APRIL 8. Im not one to pick an exact day, this far in advance, but lets say plus or minus a week of that day we should see stronger selling. Also keep in mind that the 9-month cycle bottom should occur around early JULY(JULY 8). Here's a rough sketch of what I am expecting: 1) APRIL - pullback of 5-10% 2) Late APRIL to mid MAY - a rebound of about 50% of the pullback or a STAIRSTEP(flatness/zig-zag) 3) Late MAY/early JUNE - more selling 4) Late JUNE/early JULY - a volitile and quick UP/DOWN pattern bottoming in early JULY. 5) mid JULY - heavy buying promoting a strong rebound By the early JULY bottom, the total size of the pullback from 10,000 could be 38%-62% of the 2600 point runup from last OCT's LOWs(FIB retracement), which would be about 1000-1600 points(9000-8400). The 200 day moving average is now 8857, and at that time would probably be in the 8800-8700 range. If we get that low, it could be a great buying opportunity with the DOW possibly running up 1000+ points in a short period of time, and I would not be surprised if new highs were set thereafter. If that rebound is on weak market internals again, like the runup from the OCT lows, then I will suspect that a major peak, possibly the TOP of this 16 year BULL MARKET, could arrive during the 4th quarter/1st quarter 2000. Great way to start the new millenium. Seeya