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With some 40%+ of trading coming from
programs and hedge funds, one has to watch carefully for the head fakes.
Tuesday's was the best I recall seeing with 10+:1 A/D volume and extreme
strength in the OEX and NDX stocks (nearly every one showing green). I've
seen 10:1's hold for a half hour and then die, but not this one. I repeatedly
checked carefully under the hood during the first two hours and could find
nothing suspicious. Then the hammer came down, not a sudden stampede from
program trading but steady, unrelenting, selling.
Technically, it looked like a complete
failure to break and hold on a rally out of a critical support level. I
believe this should lead to another leg down.
Earl
----- Original Message -----
<BLOCKQUOTE dir=ltr
>
<DIV
>From:
<A title=delta88343@xxxxxxx
href="">delta88343@xxxxxxx
To: <A title=realtraders@xxxxxxxxxxxxxxx
href="">realtraders@xxxxxxxxxxxxxxx
Sent: Wednesday, May 19, 2004 7:55
PM
Subject: [RT] SP 5-19-04
Damn these choppy markets!
From the attached chart, it appears this low with a centered point
date of 5-17 is going to be late (indicating weak market), which can be normal
for this type of scenario (2 cycle lows [larger and smaller] acting together).
I've been concerned with this projected low point (5-17) because of the
very early apparent low made on 5/10. It was just too early, but there was no
evidence for the past week that would indicate yet another thrust to the
downside was about to occur, except for toadies action. Other indicators
contradicted the drop on 5/17, so I was not surprised to see the market move
up over the past 2 days.
But with toadies action, it appears apparent at this point that "the
low" for the 5-17 projected low will be late. Fore this to be true, we must
take out the closing low of 5/10 @ 1083.40, then everything will make
sense.
Only after that occurs will I feel safe going back into this market
on the long side for a short trade. Fortunately I've stayed out of this chop
since 5-10.
We very well may break the 200 day SMA on a closing basis.
<IMG
src="">
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