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To: Lucretius who wrote (38832)	5/6/1999 9:24:00 AM
From: John Pitera	Read Replies (2) \| Respond to of 86076

Peter eliades say his bearish pattern negated. Breadth doing something it has never done before. Peter Eliades' Stockmarket Cycles update for Wednesday, May 5, 1999. Today was the 30th day of the churning pattern, but it tried hard earlier in the day to break the streak. The advance-decline ratio got down to .588 intra-day, that's the lowest intra-day ratio reading in several weeks of trading. The lowest intra-day reading, mind you. A Sign of the Bear signal could have set us up for a potentially very bearish resolution over the next few weeks, but now, of course, we lose the pattern completely. As we have noted before, it could still lead to a bearish resolution, but the factors that have led to a classic pattern in the past have now failed to appear. There have been some very negative resolutions off the churning pattern that went longer than 27 days, but they generally have not been classic bear market patterns. We also have to be watchful over the market's internals which are improving more than could be expected if it were following in the footsteps of the 1929 or 1972-73 pattern which was exhibited between January 8 of this year and March 23 when the daily advance-decline line made a new low below the October of '98 low. Despite the positive closes on most of the indices today, and the slightly positive advance-decline line, 1565 stocks up and 1444 down, the McClellan Oscillator actually moved to its lowest reading in over three weeks today, although it did remain well into positive territory at a +79 reading. It appears as if breadth is in fact accomplishing something it has never done before in history. That is it is trying to turn from the worst measurable breadth divergence in history to positive readings, once again. The McClellan Summation Index which has +1000 as a neutral reading is actually approaching the +2000 level with a reading today of +1878. If breadth expands again from here over the next few days along with the popular averages in their up-trend, there will be little left to make a short term bearish argument about. Stock Index future traders, we shorted a break of 1329.10 on the June S&P and it looked good as the market broke down to 1322, but the strong rally from there stopped us out at 1338.90 with a loss of $9.80. Tomorrow, we believe the rally must stop almost immediately or significantly higher prices will be seen. We are going to try to sell early tomorrow with a short sale at 1354.50 market if touched with a very close stop at 1359.50. Obviously if they open above the 1359.50 that instruction would be canceled. If you are stopped out at 1359.50, you may go long on a pull-back to 1356.90 with a stop at 1344.90. After that you may go short again only on a break of 1329.00 with a stop at 1336.50. The XAU exploded to the upside today, and a big question is whether this is the start of something big to the upside or the end of an explosive rally. To us it looks as if some upside projections are being approached now around the 80-85 level. We will be watching it closely over the next day or two. There are no new projections on bonds. Have a great day. We'll talk to you tomorrow.