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While my NASDAQ model remains long and relatively healthy, it is not far
from a corrective sell. The NYSE model ignored the last rally and is now
in a position to go long if a broad rally begins. I would however,
suggest great care here as the SP has a) bounced off overhead resistance
at the 18Oct-31Jan TL and b) has once again closed below the Oct98-Oct99
TL. The last rally failed just above the 62% retracement of the prior PH
and the last decline has already closed below the 62% retracement of the
last rally and below the 31Jan PL which should have provided good
support for a w.2 bottom. Further complicating the issue is the failure
of the "w.2" to form properly in either price pattern (minimum ABC) or
time (minimum 4 days equal to rally). While I suspect we could get a
snapback rally for a day or two, it looks to me like there is more work
to do on the downside.
It is difficult to buy into a bullish flag, even on weekly chart, since
we have already retraced 62% of the distance between the most recent
major PL and PH. Normally bullish flags are contained within the 25%
(preferable) to 32% retracement levels.
Earl
----- Original Message -----
From: <Jpilleafe@xxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Wednesday, March 08, 2000 5:15 AM
Subject: [RT] S&P500 Near Term
> S&P500 Near Term Perspecitve from Jim Pilliod....
>
> For what it's worth,..I am constructive near term on the US
> Indexes,...and got long the close Tuesday. I view the S&P500
> having good support about 1% lower,...and view drop of Mon and Tues
> as a likely Wave 2 with a potential Wave 3 (upside) to follow.
>
> Perhaps the S&P500 bullish declining flag pattern off the
> late December high is a valid perspective,...as upside breakout would
> surely fool the greatest number of people at this point. Also we have
seen
> this pattern work well with the S&P500 in previous years,..most
recently in
> 1999,...as in the 07-19-99 high to 10-18-99 low declining flag last
year...
> <A
HREF="http://www.decisionpoint.com/members/DailyCharts/SPX.html";>Decisio
n
> Point (tm): Daily S&P 500 Chart</A> .
>
> The Rydex Ratio of Nova to Ursa fund assets fell below 1.0
yesterday,..
> coming in at the 0.96 level. While this ratio can drop as low as .25
> level,...
> usually good suppport in trading range "dips' can be foud whith ratio
below
> the 1.0 level.
>
> Time- wise,..the next key timeframe after the 03-08 (today...should be
> upside move) is the 03-12 date. in my notes,...I have the 03-17 as
likely
> high,..and 03-21 as likely Key Low. I have no idea how things will
work
> out over the next few weeks. Also the VIX has been a good trading
range
> guide recently with SELL signals coming close to 30 (29.50,..etc) and
> BUY signals coming in close to 21.5,...etc.
>
> I see the site with Nature's Pulse dates through September is
updated,...at
> <A HREF="http://home.golden.net/~laird/TimeSPX.htm";>Time Chart for
S&P500
> Nature's Time Elliott Wave Fibonacci R N Elliott Technical Analysis
Stock
> Market</A> or... http://home.golden.net/~laird/TimeSPX.htm
> This is worthwhile for anyone interested in the Nature's Pulse type
> projections.
>
> Also,...one thing that has been bothering me is the weak P/C ratio,...
> complacency. As I go over this in my mind,..I am becoming
> more complacent myself with the weak or low P/C readings. My
> thought has been that players would be very reluctant to buy Puts
> with the NASDAQ making higher highs...and indeed it took tech stock
> weakness on Monday to get the Index P/C ratio to firm up on Monday.
> Steve Shobin (Lehman Bros) on Bloomberg notes that complacency is
> not a problem as long as market keeps making higher highs,..as the
> NASDAQ is doing,..and complacency makes sense. Also he sees
> NASDAQ as being in good shape (Growth stocks vs. Value,.etc) and
> key support for the OTC100 as 3850 level. I tend to agree,..this is
uptrend
> support for rising wedge on OTC100. Shobin also noted that CISCO and
> Russell 2000 are Bell Weathers to watch here. Makes sense.
>
> My near term strategy will be the same,..remain in US Indexes until
upside
> overseas follow through is indicated as highly likely,..then go after
that.
> Just
> wanted to share these thoughts,...any feedback is much appreciated.
>
> Regards, JIM
>
>
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