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

To: Compadre who wrote (15797)	6/4/1999 10:07:00 AM
From: StockOperator	Read Replies (1) \| Respond to of 99985

Good Morning, I hope the last couple of weeks have been profitable ones for all of you. I have taken a week or so off just to take a break and have done some "cleaning up" on the group of stocks that I follow (mainly adding more to the group). The position of the markets at this time, however, are compelling enough to make me put myself back in the ring. The damage done the past couple of weeks has been most evident in the high tech and interest sensitive arena. With the nutz taking the brunt of the damage. But yet some of the majors like CSCO, QWST, WCOM and PMCS have held up pretty well. IMO, what has happened over the past couple of weeks is that stocks (in general) across the board have worked their way down to their long term support line. Yes even stocks like RNWK which has fallen significantly is currently resting on its longer term trend line. AS a matter of fact look at any number from this varied group FDX, MRK, CMB (long term channel) AOL, all sitting at pretty critical points. While stocks like DELL and YHOO have actually broken through their longer term trends. Don't get me wrong I am not downplaying this retreat in prices. It has been devastating for those playing the wrong direction. The point that I am trying to make is that if the markets are unable to hold these key areas this selling is not over yet if anything the pace will surely accelerate as selling often does as these trends are broken. Looking at the major indexes the DOW is also sitting on it's longer term trendline. The NAZ needs a serious rally here to make up the damage seen. Here again any failure to rally and we could see a volatile breakdown of the pattern that's established. The RUT is sitting at the apex of a rising wedge that should break one way or the other. Overall I believe we are currently at the fork in the road. An inability to hold these current levels will surely cause more carnage on the short side. There is a possiblility that the real selling hasn't even begun yet. So I think you definitely have to feel comfortable trading the waves of this market at least until the next FOMC meeting at the end of the month. That meeting I am sure will set the course for our future market direction. Regards, SO