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

To: Bull RidaH who wrote (10216)	4/8/1999 5:51:00 AM
From: bearshark	Read Replies (1) \| Respond to of 99985

David: The potential now exists for a significant change in direction within the next 5 days. I was looking at your notes and they are consistent with my thoughts. I was almost praying for that late rally yesterday afternoon. I just hope we can open up on lousy volume this morning. That would get us to about 1347. My thoughts are also consistent with yours on the extent of a decline. If we get a healthy decline, I would be ready to go long again. I think this is an excellent opportunity. I just hope it works out. I am quite excited; bearly able to restrain myself.

To: Bull RidaH who wrote (10216)	4/8/1999 11:02:00 AM
From: Bull RidaH	Read Replies (1) \| Respond to of 99985

Here's Last Night's MDA Ewave Commentary for those interested and who missed it due to page problems: April 8th, 1999 Violent price action Wednesday delivered truly great trading opportunities, as prices swung down early on, then up into new highs, then down for the majority of the day before rallying strong after 2pm into the close. The bullish outlook this column gave yesterday proved to be well founded, as 1308 SPX was never in jeopardy. The 1313 support level pointed out in yesterday's chart held all downside attempts of the wave 4 corrective action, and proved to be an opportune place to add to longs. Realizing that the whippy upside action in the a.m. was "b" of 4, I sold into the available strength, but reloaded on calls in the early afternoon and am holding them again overnight... Already with a 43 % profit. Last night's column and 2 week chart made mention of a "wedge" formation that COULD pose a problem for the market in achieving the upper targets presented earlier in the week (1359-60 SPX). After reviewing other indices, it appears that this wedge is not a trend ending wedge, and should be disregarded. Thus, the upper targets are reinstated, with one caveat: Since wave 3 was SMALLER than wave1, then this 5th wave can be no larger than wave 3. With wave 5 starting at today's low of 1312.55, and considering wave 3 was 44 S&P points in length, wave 5 can go no higher than 1356.55 SPX. Since the break out from symmetrical triangle targets just north of 1360SPX, the mid 1350's could be achievable. If wave 5 holds the same ratio to 3 as 3 had to 1, then this wave 5 would terminate at 1347.50 SPX. I will begin lightening up on longs as we near 1347.5, and will certainly be flat with a short biased if we see the mid 1350's on Thursday. Keep in mind that a 26 day cycle high is due on Friday, recommending a sell of the high of the day on Friday for a profitable trade. I will be initiating/adding shorts on Friday at what I believe to be the high of the day no matter what. Good looking short candidates include CD, EFII, TLAB, UTX, DIS, WMT, ERICY, & Dell. 5 Day Cumulative Closing Trin was 4.6 for today, and even more importantly, VIX has yet to slide into the area designated in Vix charts below as the market topping zone. Any Vix readings below 21 tomorrow will provide strong confirmation a top is at hand. Many appear to be jumping the gun on puts, keeping Vix high and producing a bullish OEX put/call ratio of 1.6+ for Wed. Parabolic upside action tomorrow should solve both of these problems, opening the door to downside action. The ramp is ready... Ready for the ride? David