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

To: StockOperator who wrote (10331)	4/9/1999 12:02:00 PM
From: Robert Graham	Read Replies (1) \| Respond to of 99985

Here are some different thoughts on this topic of market volatility. IMO the kind of volatility we have been seeing is caused by price swings, not on-and-of-and-on-and-off patterns of price hitting successive resistance. The kind of pullbacks we are seeing on the heels of price increases indicates traders willing to take profits quickly. Also when prices do swing their way, traders will more eagerly jump on the bandwagon exaggerating the swings. This looks to me like nervous, anxious behavior. Then take the move of money out of the NASDAQ market, where only a part of it has returned on a tentative basis. This movement of money from the NASDAQ to the DJIA is what caused the move up into new highs by the DJIA. IMO this was not caused by new money or money of a longer term duration. This is not an indication of positive exuberance in the market. The market is now waiting for leadership right now and is unwilling to commit as evidenced by most of yesterday for instance. I see only a few speculative issues are getting good action today. Apprehension and fear has been motivating much of the trading in this market. Not exuberance as defined by a strictly positive sentiment. Still, I have been seeing good underlying strength in the market. Also this fear by many of the public day traders can flip and turn into exuberance very quickly under the right conditions. This can cause large price moves to the upside. But I think we need a pullback for this to happen. And money needs to move back into the NASDAQ market. Perhaps the DJIA can give us this pullback. Just some thoughts. Bob Graham