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

To: HairBall who wrote (10414)	4/9/1999 12:55:00 PM
From: Robert Graham	Read Replies (1) \| Respond to of 99985

Lets see, on what was suppose to be a strong down day for the NASDAQ per Donald Sew's cycle approach, it ended up being an up day along with two other indices making new highs. A couple days ago money moved from the NASDAQ to the Dow type of market. Apparently the market is nervous and scampers quickly to what is making headway. This is even seen in the secondary issues on NASDAQ which has been continuing to see action. When this movement of money happened, no surprise when DJIA made new highs. What was a surprise to me is that soon the NASDAQ began to once again move up as it did yesterday. Program trades is another tool I use to gauge the underlying strength of the market. Program sells indicated good market strength. They were made not at the best positions for this type of monitoring since they were made in an area of congestion, but when I see the TICK swings down a substantial amount (over 300 to 350 points) and the DJIA does not even burp, this is a sign of good underlying strength. There is further evidence that sellers are not to be found in this market. Look at how YHOO broke down and helped to pull down some of the tech leadership stocks. This is probably one reason money left the NASDAQ market. Instead of causing a market sell off, the money rotated into other markets. But a relatively short time later a bottom has been made and retested in a significant way in the NASDAQ and we now have seen the NASDAQ recover most of its losses and is close to challenging its previous high. Much of this happened during the down cycle phase of the index as per Sew's cycle analysis. There were morning sell offs, but then this lead quickly into an intraday bounce and price gain by the end of the day. Yesterday I saw further evidence of a continuation of the move up by the NASDAQ as key tech stocks quickly moved up from their sell off validating their previous bottom and were challenging important resistance. Some money apparently is coming back into the tech stocks and the NASDAQ market. We now see the DJIA recovering from its sell off from this morning and within about 30 points of its open. Lets not forget in the recent past where all three indices made new highs on the same day. Given all of this and more, a longer pattern of ongoing strength in the market, it is no surprise that the NASDAQ is continuing to move up with the DJIA. And this is supposed to be a down day for the DJIA. I am continuing to see more sings pop up of weakness in the market. And I am not talking about breadth here. But IMO nothing has happened yet to overcome this strength in the market. I still expected more of a market sell off that we have seen so far. However, the market is showing up surprisingly strong even on a day-by-day basis now. I do think that more money needs to move back in the the NASDAQ market and its tech leadership. The Internet issues need to see a resurgence of speculative interest. YHOO is one of my concerns here. And market breadth does have to improve for there to be legs to a rally which means attracting all that money back from money markets and bonds where it has been sitting. Just some observations. Bob Graham