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>Did you take a look at the S&P-500 with 200 EMA of the Close ??
Excellent uptrends dynamic Support-line.
>July '96
>April'97(is this really true ?)
>Oct. '97
>August '98.......
Sorry don't get your point here.
If you mean the occuring corrections: they where then due to the rising of intrest-rates.
Also in the period before that, the markets did rise up "too far"(too far away from their
averages, the SMA50/200).
Usualy this is then a time to correct, roughly halve of the former rise, better known as the
standard technical corrections( the 'natural' way and moving back towards times average).
These too where of the natural technical corrections kind(upose to the 'unnatural' crashes,
when markets correct in a too drastic(>40% from former top) way).
Technical corrections usualy end up (on) in SMAs "soft landings".
>When would you go long ? And when short ?
>Do you need to combine this with another indicator ?
Suggest NOT ONLY doing that, but too, always to do that with all of your market
actions,explorations etc..
And as such do not 'only' use the indicators, they are after all only giving an indication, but
explecitly use the indexes, charting, patterns, channeling & other tools etc. for the more
advanced forecasts.
Note too, that downtrends can move fast and that these always come with intermediate interuptions
on the way down, i.e. like the flags, counter-trends etc.
The current UP-Flag in a downtrend(=bearish) is still valid until 1060 is downbroken(if the move is to the
downside) or 1120 is upbroken(the move is to the upside).
SP500 - Okt98 Target 970(intraday) and 1050(Channel Support) - see chart(gif).
As interest rates continue to decline(drive behind the former uptrends) and profits generally speaking
are still growing(a bit less due to 'Asia' downgradings) and also as the markets are transforming from
an interest-rates driven market into a profits-driven market, a futher continuation of the MT trend is to
be expected, incl. its ups and downs.
With the above knowledge, on the Upside a trends continuation move towards former High(1188)
can be expected, wich will find a too strong Linear resistance(1156) and Shoulder resistance(1125).
This move will still validate the H+Ss pattern. A futher natural technical correction(see above) of this
years rise can then be expected towards the MT support line at 1050, also the SMA200 level.
This level can also be calculated by the ST-trends rise since Jan98-Low(915+((1188-915)/2)=1050).
Currently a H+Ss "Reversal Pattern In An Uptrend"(=bearish) has developed with H=1188 and NL=1078
and when calculating sets target at (NeckLine 1078-(1188-1078))=968.
In any event a worst case scenario can be expected when futher disasters like intrest rates attempts
to rise, worsening of the Emerging Markets Turmoil started out by the Asians etc. will occure, this then
leaving a decline towards LT Median support line target of 960-970 range. This is also the target when
downcolapsing the H+Ss(968). From the "rising wedges"-fall out(=bearish) a target of 971 and from
the former "TradeZone"-resistance a major support can be found at 960.
To either go long or short would depend on "your estimating" time, speed and turnaround levels in this
wide ST 'sideways' trading market(since last High, now ST downtrend) in a LT uptrend since 1993/1995.
A combination of the basic indicators MACD, CMO, RSI, Mo, LinearReg and StochOsc etc. in
combination with their 10 or 20 day SMA will provide you with these(triggers).
Also best to be used on a 'daily' AND on a 'weekly' chart.
Next Major move is to the upside, with as the target the former High(eg its resistance), finishing EWaves
correctional "B-wave".
Regards,
Ton Maas
Ms-IRB@xxxxxxxxx
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