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March 28,1998


Positions

SP500			60 % long change  ********
30 yr. Govt. Bond		40% long change *****
Gold 				 0% invested

Due to Market Action yesterday and prior deterioration of breadth our
Market Positions have significantly changed. We are now scaling back
in both SP500 positions and as well as bonds. Before market action
yesterday there were many negatives on the horizon. These negatives
are becoming more and more apparent. Listed below are some more
examples.

1 The Transports have had a Double Top. That one itself isn't cause
for alarm but with much divergence's it is just one more piece of the
puzzle. 2 Recently there has been record volume in the NASDAQ,
actually highest ever. 3 The 2 Peak and Dome pattern (August 97,Dec
97, Nov 97) 4 When comparing up volume to down volume whenever this
ratio is greater than 1:9 there exists possibility for a WATER FALL
CRASH. This was the case yesterday. 5 there are many cycles at work
and many are reaching their thresholds. One in particular is the Vix.
It's cycle low was at the end of March 98 6 Prior to yesterday there
was extremely low put /call ratios

It is extremely difficult to call a top but there is a greater
probability of a top then not. We are expecting a rally in Europe.
They are down 7-16% from their highs depending on the markets.
Contrarily we are looking for the Sp500 to continue to go down for
another 1-2 weeks then have a final rally and this would help us in
confirming the top is in place.  This would be one more for the buy
the dip crowd.  We recieved a signal to go long on Jan 1998. A very
rare signal that since the 1940's has only signalled 17 bottoms. It is
an exhaustion type of indicator and has proved a nice trade from 920.
Now we are starting to scale out..

We run about 40 different systems measuring breadth.. momentum..
interest rates and even sentiment. Personally I feel  extreme caution 
is warranted.

Andy Abraham cta
www.angusjackson.com