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

To: Monty Lenard who wrote (13285)	5/9/1999 10:03:00 AM
From: Lee Lichterman III	Read Replies (1) \| Respond to of 99985

Thanks for the come back and read. Well, I have to admit that this weekend I was biased down on the cyclicals and was looking for shorts there and just in case, I was looking for longs in the techs in case of a bounce. This morning I went searching through my data base looking for shorts in the sector indexes that I had sell signals on and longs in tech areas. All I will say is I was amazed. I will admit I don't pay attention to the cyclical and old granny stocks since the movement is usually in the tech sector so I keep most up to date in the techs, Biotechs etc. As I scanned through the charts and drew trend lines on old stocks like Dupont, Goodyear, UK, etc I started noticing that if I went back to at least the early 90s and allowing violations on the down side yet keeping the slope in agreement with the overall trend, these stocks are not as over bought as they appear on the short term charts. After looking at the trannies, chemicals, DOW components, Gaming stocks etc. These were all due to bounce and could run quite a ways longer. After all this work, I was only able to find one good short prospect and a few others that if they run a little more will make the list but it probably won't be for a week or two at least from today. In other words, this rally in the previously unloved sectors could go on a while longer and look like a blow off top when looking at the short term charts, but long term, they are just catching up and are just now nearing areas where a few may be going too far too fast. There are many others that are just now getting to the bases of their long term charts so they could rally for quite a bit longer pushing their respective index charts almost verticle into extreme over bought territory. Of course none of this takes into effect the Bond's interest rate climb etc but since most of these are no where near high PE stocks, they will be affected less than internets and many other High PE tech stocks. Even IBM which started the weekend on my short list due to the short term and weekly chart that I normally use came off the list when I looked at one of my other charts for DOW components because it showed it could run as high as 260 before it would be in extreme territory. Of course these were all unloved before and could become un-loved again real fast. I am just trying to get a cross that although these appear extremely over bought short term, many are just now catching up to their longer term trends. I am judging them on TA only and have no idea what their FA backgrounds are, earnings growth, Macro or micro pictures etc. I think the next few weeks could be a crap shoot either way since their are some old street favorite big techs still due to report, splits coming up in a few more yet they are fighting the uptrend in rates, China news etc. Just like the rest of this year so far, it will be a stock pickers market for both long and short plays. I just don't see the BK that LT and a few others are proclaiming yet since we are not stretched as far as I origianlly thought we were. Of course I am seeing a lot of double tops and a few waterfall drops that could equate to the July time frame of last year. I just feel that we should try one more push before throwing in the towel. Looking at some of the techs and Internets stocks, another week or twoand most of these will hit their lower tines onmy forks which could propel them up as they fight the drop. The success or failure of those bounces will be the key IMO of if we crash or not. Maybe if there is no rate hike after the FOMC meeting or a cease fire in Kosovo we will get the last blow off where we can load up on the poots <ggg> Good Luck, Lee