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

To: Compadre who wrote (16043)	6/4/1999 9:14:00 PM
From: stockycd	Read Replies (1) \| Respond to of 99985

jaime and thread, My VERY short term fib retraces have the DOW at 11000. The SOX put in a bullish engulfing candlestick pattern today. OEX, SPX look great. Even if this is a stair step, SPX 1350 is the short term target and there is money to be made. Semi-sector will continue to ignite. Even DELL's 60 minute chart is showing signs of hesitation. My time projections for this rally are until about Thursday/Friday. The selling should start prior to the CPI announcement. Covered all shorts this morning. Will try and post more analysis later in the weekend. SPX, NASDAQ, techs--hourly charts looking real good!!! Chris

To: Compadre who wrote (16043)	6/6/1999 12:19:00 PM
From: StockOperator	Read Replies (1) \| Respond to of 99985

Jaime - Thread Friday's move was significant in that the rally that hit the market came at a time when most stocks and indexes are sitting at very critical support levels. The weakness of the past couple of weeks has seen prices across the board pushed down towards their long term trend lines. The Dow is a perfect example. From our October bottom the DOW rallied from 7400 to 9750 before consolidating and moving sideways until it broke out again in March and pushed towards the 11,200 range. This recent pullback to 10300 has carried us right back to that longer term trendline (from our Oct. bottom). So Friday's move is very significant in that that support appears to be maintained. Of course one index often does not tell the whole story. Taking a look at a more complete picture of Friday's action you will notice a serious breakdown in the VIX with prices actually closing at the lows of the week. The RUT jumped nicely as it is about to attack a rising wedge formation on the monthly chart. The Utilities which have been on a huge run since April has broken out once again after a short term consolidation. With the yield's on the 30yr running into very long term resistance at these levels, perhaps the Utilities (this whole time) have been the "true" indicator for the future of inflation and long term interest rates. I must admit their tandem rise in prices during the past couple of months has been very interesting to see. The short term pattern on the NAZ has been much more difficult to read. However, the longer term pattern also has the NAZ sitting at a major support level. A level that it has been retesting since 2/99. The interesting thing about Friday's move was that a breakout on the DOW and S&P was much more apparent, the NAZ has not broken out just yet. However, the close on Friday has placed prices in a position where they should break this coming week. So I do believe we are about to see a rally from our current levels. Keep in mind that there is still resistance along the way. For example the S&P has some immediate resistance at the 1340 level before it even gets to it's old highs (1376). This applies to all the indexes as well. Here are a couple of specific observations after Friday's close: After consoldiation the past couple of weeks (filling the gap) IBM looks poised for a breakout. Look for it at the start of the week. Stocks like LVLT, RNWK, DELL, MSFT, YHOO, INTC, AOL are positioned for a move this week. While stocks like CSCO and PMCS have breakouts that are more apparent. The airlines appear to have bottomed. Stocks like UAL, U, AMR are turning the corner and should start to move. JNJ moved big Friday. Look for continuation. Stocks like WCOM closed at the highs of the week are going to try to take out some resistance that remains. Bank stocks like CMB moved nicely on Friday while JPM appears to have set itself up to do so this week. So to sum things up. I believe we are about to see prices begin to move higher off these longer term trend lines. As I said earlier, there is still plenty of resistance along the way. So by no means are we homefree. But I think prices will start to move higher attacking the remaining resistance and eventually position themselves for either a major breakdown or breakout based off of what the FED does at the end of the month. Good trading. SO