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

To: Les H who wrote (15839)	6/3/1999 11:13:00 PM
From: Les H	Respond to of 99985

Greg Nie, Everen Securities For: June 3, 1999 In our opinion, the stock market is still on track for a June recovery, at a minimum an oversold bounce, probably better. One crutch and one speculation are the basis for this guarded optimism. The May sell-off has had a temporary look from its inception, based on light volume. The sell-off is starting to produce a bit of an oversold condition. With negative breadth in 6 of the last 7 sessions, the TRINs are heading for friendly territory. The 10-day is at 1.13 and the 30-day at 1.03. Further, the shift in investor psychology embracing a strong economy should produce a willingness to position for a good July earnings season and largely dispense with confessional season as a broad market influence. Getting to that oversold starting point is still a work-in-progress, bonds are the culprit and for good reason. The chart pattern of the September contract is rather ugly, making at least a touch of 6% by the 30-year bond a fait accompli'. A surge to and/or through 6% on the long bond could cause another dose of indigestion for stocks, probably 200-300 Dow points, but would also enhance the developing oversold condition. Once again, the success of the expected June rally should be measured more on how the attempt unfolds rather than where. Big breadth, especially given the sloppy condition of breadth indicators, accompanied by above average volume, essentially the April formula or better, are the keys to a tradable move. Searching for the floor would appear to be the likely path for a little longer. SPX: 1294.81