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

To: Compadre who wrote (10482)	4/10/1999 12:33:00 AM
From: Vitas	Read Replies (1) \| Respond to of 99985

Jaime, not only am I counting them up, but I'm adding them up too. Whatever that means. Vitas

To: Compadre who wrote (10482)	4/11/1999 11:20:00 AM
From: StockOperator	Read Replies (1) \| Respond to of 99985

bears are counting their chicks already (after the CPQ announcement). They may well be right this time. What are your thoughts for Monday? Jaime: Before I respond to your post I would like to just throw my two cents in on the discussion about TA. Over the last couple of days there have been some interesting posts regarding different approaches to TA in today's markets. The point was made that if everyone is looking at the same charts and expecting the same results, doesn't that impact the effectiveness of TA in today's markets. On the surface that statement makes a great deal of sense. But I think one only has to follow this thread for a short time, or any handful of TA experts out there to realize we often do not SEE the same things. Think about it, how many times have you seen the experts (Murphy, Bollinger, Bloch, Favors) interviewed on the same day, all having completely different outlooks on the market. These guys are the pros, if they're not seeing eye to eye it must tell you that chart patterns can mean different things to different people. Besides opinions can and often are influenced by personal experiences and outside factors. Like seeing a pattern on the chart that looks bullish but letting the a-d line skew your read on things. My own personal opinion on this subject is that traditional TA methods in today's markets STILL work. Regardless of whether or not you're trading a internet stock or a big blue chip. Granted, the time factor for how patterns play out for AMZN may be a lot shorter than for a stock like KO. Nevertheless, the charts still manage to capture the daily struggles between the bulls and the bears. Perhaps the difficulities of applying TA when trading has more to do with how you arrive at your conclusions than the validity of TA itself. That's why I think it's dangerous to make comments like "TA doesn't apply to these net stocks" or "There are times when TA does not work." Beliefs like these will ultimately affect your performance simply because you have planted the seeds of doubt when using TA as a trading tool. Just some thoughts. Jaime I am going to post this so I don't loose it. In my next post I will respond to your question. SO

To: Compadre who wrote (10482)	4/11/1999 12:50:00 PM
From: StockOperator	Read Replies (4) \| Respond to of 99985

Jaime, As far as the markets are concerned. The CPQ announcement was no surprise to anyone. Another poster on this thread summed it up pretty well by indicating that the stock has been under pressure for a while. Personally, I don't follow CPQ but I would imagine with Friday's announcement and the fact that the price is already down considerably, CPQ may actually be closer to bottoming out here. I think Monday the stock will go down for obvious reasons but as a trader I would keep a close eye out for any reversal here. The real question I think we are all asking ourselves is whether or not CPQ's announcement, by itself, is enough to reverse the bullish run we've seen the past two weeks. Again, many will find their answer in the deteriorating market internals. However, I think to tilt the odds in your favor you have to take a look at the market from as many angles as possible. We know what's happened to CPQ. But what is the rest of the market telling us here? I think the best place to start is to look at where we are currently. The DOW, NAZ and S&P have clearly broken into record highs after months of consolidation. We have a handful of the major players in each index that have already broken into new highs, while many more are attempting to break through congestion areas. The trannies and the RUT are also in heavily congested areas. To build a solid platform under this bull run these two remaining indexes need to rally in a big way. Therefore, I have to believe that their charts will have much more of an impact on the direction of the market than the OBVIOUS break in CPQ's price. Besides taking a good look at the companies (charts) that make up those indexes. After spending some time this weekend doing that, my personal opinion is that this bull run is not over yet. Of course we may see some temporary weakness Monday morning but when the dust settles I fully expect prices to continue their advance. When I look at the small universe of stocks that I follow, I see prices that have already broken out or are very close to doing so. Plus look at the move in the RUT and Trannies on Friday. If these two indexes begins to breakout, it should make all of us question how high we can go from here. Consider if you will the the appreciation in prices already seen by AOL, AMZN and WCOM (which by the way are still pointing higher). While stocks like T, IBM, INTC, are just beginning to challenge key resistance on their charts. Who know's how far this rally can take us before our next correction. Unfortunately for us no one has that answer. Looking at what we have on the table so far tells me that this rally is not over yet. Higher we go. SO