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

To: StockOperator who wrote (13434)	5/10/1999 10:04:00 PM
From: StockOperator	Read Replies (4) \| Respond to of 99985

THREAD I have just gone over my charts and let me say that there is very little so far to get excited about. The one stock that I see taking off here is FDX. The stock popped at some short term resistance and appears ready to take out it's old highs. Some of the nutz also bounced today. The move however, was not seen across the board in that group because many in that sector still lost ground today. Other than that the NAZ and RUT were really the only bright spots on the indexes. Actually the RUT broke through and closed at prices not seen since 7/98. Since it closed at it's highs I would assume that tomorrow will see prices move even higher. I have been giving this current market environment much thought the past couple of days and I would like once again to summarize where I think we are and list a couple possible scenarios for us to keep our eyes on. Of course feel free to make any comments. According to my read on things we are at a pretty critical point in the market. On the one side we have the DOW and Trannies presently assaulting their old highs. Today's action alone is showing that the bull does not appear to have much conviction. Both indexes actually lost ground today (not a good sign). Anytime prices are challenging their old highs you love to see a series of higher lows and higher closes as well since this speaks volumes about the strength of the breakout. Today we did not get that. This of course puts more pressure on tomorrow's trading for these avgs to close higher. The Rut we mentioned earlier. The Naz which closed higher is the one index sitting in a precarious position. Today it closed up 20+, which actually had no impact on the downtrend that is already in place. As I said earlier this index has to make a dramatic statement here which imo has to start this week. The S&P also closed down and it also needs a big push here. The utilities which closed lower today and depending on what happens tomorrow is actually giving the appearance of prices rolling over should also be watched carefully here. These technical issues should resolve themselves very shortly. So I do believe we are about to see some sort of action one way or the other in the avgs. Looking at what may cause a break in prices in either direction you can quickly come to the current interest rate environment. Rates backed off a little today however it is way too early to say that a top is in. Personally I think six percent is like a magnet here in that the market will want to go up and test that area. Is six percent enough to cause a downdraft in the market? I don't know. But based on the damage I am seeing on some of the charts with rates at their current levels I would say it is a definite possibility. On the other hand what could cause the market, especially the NAZ to make a complete turnaround and take off from this level. IMO what ever it is will be fundamentally based - some sort of event or piece of news causing the markets to take off. Remember many of those high tech generals have huge short positions which will definitely cushion any move down. Anyway, how might the end of the war in Kosovo affect things. Is that by itself enough to reverse some of the damage already done???I think the one piece of news that will make or break this market will be the news coming out of the FED meeting. That of course is over a week away. So I am watching this week's action very carefully knowing full well that an end to the war may come at anytime. Rates at six percent may also come by the end of the week. What ever happens I am preparing myself for the possibility of a fast moving market. Regards, SO