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

To: StockOperator who wrote (12577)	5/2/1999 3:02:00 AM
From: Compadre	Read Replies (2) \| Respond to of 99985

SO: The rebound late Friday of the markets had me in doubts for a while. I was a strong rebound and pretty convincing as seen on the intraday charts. As I examined the daily charts this is what I found: COMPX is below the 10 day EMA since Thursday. (2 days in a row) COMPX the 13 day SMA crossed over the 21 day SMA on Thursday. COMPX 55 day Stochastic turning downwards. COMPX MACD crossing sell signal is very obvious now. And more importantly, there is a bearish divergence showing now. COMPX 34 days W%R is now in mid range, turning upwards. But the time spent in the overbought area was just as short as compared to the time spent in the last oversold period. Previous to this the time spent in the overbought areas was much longer that the time spent in the oversold area. I.E.: the period between 3/34 to 4/19. COMPX volumes gradually diminishing indicating that immediate trend may continue. COMPX last 3 cycles lasted 10, 14 and 18 days respectively. The total point loss from the top of these cycles were 185, 177 and 297 respectively. This is hinting to a Megaphone formation where the waves get larger and larger in magnitude with time. This last method that I use I don't know the validity to it but it is applying common sense more that anything else. If you joint all the highest tops and all the highest bottoms of the daily chart, you can form an envelope pattern. One could see an obvious topping pattern on this envelope. COMPX Stochastic in mid range. All of the above can be applied directly to the NDX as well since they are so closely tracking each other. Now, as I mentioned at the beginning is that Friday's last minute rebound puzzled me because it was so strong and showed no hesitation to the end of the day. But it failed to penetrate the 10 day EMA. Everything indicates a down trend or side trend is developing, and the only explanation that I can come up with is that it was short covering. As you can remember, on Thursday I called for an impending 1 day bounce for either Friday or Monday. Almost at the same time, some other people on this thread called for the same thing. So My thinking is that if so many people called for this one day bounce here, there may be a lot more of them calling for the same. Therefore I am implying that these people may have shorted the NAZ in the morning on Friday. Since shorts do not like to keep their plays over the weekend I summit to you that they covered their plays at the last minute causing this rally. I must also add that the OEX and the SPX had extreme oversold readings at the low point of Friday. Triggering a buy signal in my trading system. This may have contributed to the rebound of the NAZ as well. I think I have occupied enough bandwidth of this thread today so I will let someone else take over. But I will be waiting to see your thoughts. Regards, Jaime

To: StockOperator who wrote (12577)	5/2/1999 7:31:00 AM
From: bearshark	Respond to of 99985

SO: I remember you were posting notes about the Utilities (I use the Dow Jones version). I believe it was in the 1970s that I learned something about the TRANS. Although it was a transportation index, it was also used as a natural resources play. So yesterday, I went through and found that ENE (Enron) was significantly responsible for the quick move in the utilities. It has moved up about 6 points in the past week. quote.yahoo.com From reading its brief profile, ENE may be getting a boost from oil and gas. biz.yahoo.com I went through the remaining 14 utility stocks in the index and found four others that moved up more than 1.5 points last week (I may be off by one or two because I was eyeballing charts.). One had an upgrade that moved it, etc.