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Strategies & Market Trends : The 56 Point TA; Charts With an Attitude -- Ignore unavailable to you. Want to Upgrade?

To: E Newman who wrote (28640)	4/20/1999 3:51:00 AM
From: Doug R	Respond to of 79180

Hi E, The problem I have here is that the next move up in the market is going to be a typical "suckers' rally". Not that I'm bearish on the market overall...it's just that a correction is in motion. The first stage of a typical correction was just brought out into the open today. There is usually an "attempt" to "rally" that follows this first "shot across the bow". My concern is that this suckers' rally may not even occur. Therefore, from here to the bottom of the correction, I will not publicly consider any stock as a long play. I do hold 3 stocks long here, but I will treat those 3 in my own way according to my own tolerance for risk and time horizon. After today I can say that there is no risk/reward dynamic that justifies a broad-brush short strategy.....yet. The strong tendency of the market to move up to a retest of the general technical breakdown is still ahead. I can say that this prospect is very likely insofar as the number of advancing issues over declining issues strongly telegraphs a "low flying" rounded top. "Low flying" in that it will be lower than the record highs recently achieved. For the more chartwise....to properly assess where a rounded top has actually "dropped out", you MUST go back to price trend and technical activity that was already in place BEFORE the rounded top began to the upside. To try timing a rounded top using the data within the formation, automatically puts you behind the curve (so to speak). It is absolutely necessary to analyze a rounded top formation in relation to prior activity. Using prior activity to assess a rounded top greatly enhances profitability. If prior activity shows a rounded top that leads to a real breakdown, shorting is really easy. If activity on the downside of the rounded top overcomes resistance or nails support that is established previous to the rounded top, shorting will cost you. Some would say it's an Elliott thing. I would tend to agree. Doug R