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NASDAQ weekly and daily models suggest that the NASDAQ is at best, dead
money for the short/intermediate future and likely has more work to do
on the downside. The NYSE model is very close to a buy signal and has a
rather constructive appearance - this kind of divergence is common at
important market tops. The 13 month TBill rate has moved up just shy of
2.25% since Oct98, a point which saw important highs in the major
averages excluding the NASDAQ. With fed funds futures pointing to
another 1.00% increase, the overall environment appears hostile to
equities. Thus, I would expect that the major big cap averages will
continue to move up and down choppily in a trading range which will
frustrate bulls and bears alike.
Bonds futures have completed an ABC w.4 correction on the weekly chart
and have resumed the decline in w.5. The daily chart appears to have
completed w.3 of the decline and is currently correcting the decline in
w.4 - a process which should see the counter-trend rally continue for
perhaps another week before the decline resumes in w.5.
Earl
----- Original Message -----
From: "Earl Adamy" <eadamy@xxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Wednesday, May 10, 2000 6:11 AM
Subject: [RT] Re: MKT: Nasdaq Comp.
> The markets are a very effective discounting mechanism and certainly
> have factored in a 0.5% rate increase, in fact the fed funds futures
are
> indicating further increases totaling 0.5% by Jan01. I do however
> believe that exuberant investors have not adequately discounted the
> overall effect of 2% in rate increases through May and 2.5% through
> Jan01. I think we will continue to see very choppy sideways to down
> equity markets until there is evidence of interest rate decreases.
NYSE
> model is on sell, NASDAQ model is near sell, and SP is likely to break
> the TL support I mentioned in a previous post.
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