MomentumCycles

Momentum Cycles Update for the open of Thursday, March 19, 1998:

From our estimated entry on the April 495 puts{see previous chart},we are close to getting stopped out at our 1.50 stop loss level.Longer term readers are aware of the terrific run in OEX doubles we had for the last year,until the start of February.All in nature reverts to the mean, so a period of underperformance had to be expected after a statistically unlikely multi-month run of winner after winner.

CRB came to life today.The previously mentioned double bottom near 221.56 has held again.Only time will tell if this is the end of a ferocious bear market in commodities, or merely a spike in a downtrend,but the failure of the CRB to break down here is giving second thoughts on deflation to longer term trend watchers.

On the plus side for our readers, ASTN today was up from our average entry price an amount close to what the OEX puts were down..

Breadth:

When this market finally corrects, it is not likely to let you in at a bargain price. For example, the powers that move it will enter after the close or overnight on Globex. Puts within a few strikes of the top will have doubled by the time live quotes are available. It will likely open lock limit down. So much for fantasy. Breadth was positive today, but the declines were 1348, well over the magic 1200 level. This breadth is not healthy as evidenced by the McOsc within a day's striking distance of crossing the zero line. The next downward crossing is likely to be rather severe. Parabolic stops are moved higher each day and the slightest pullback will trip off an avalanche of sell orders. Unfortunately the market orders will be filled far below the desired levels. TYX and CRB are creeping upward and this time a TYX move above 6.25 to 6.5 will definitely not go unnoticed by the equity traders. Cumissue and cumvolume turned up mid day pulling the indexes ever higher in an endless flight. CODI

Volatility:

Z Timer is getting revved up by moving to the edge of the extremely overbought zone. MVI sell pivot a few days back(dotted vertical line) has been aborted because there was no followthrough on the downside with price. That is why we call it an Alert and not a full fledged sell.

RSI, SMI:

The RSI charts have a different twist tonight. Rather than use the standard overbought/ oversold fixed levels, we thought we would try out the RSI with standard deviation bands to adjust for changing volatiltiy. With this view, the SPX has not quite reached overbought. XAU has reached oversold and its RSI is bouncing up. TYX RSI is working on a higher low, perhaps at -1.618 std dev.We will throw some more bands on it tomorrow to see just where it is.

Fibonacci Zones:

DJIA locked on to its maximum weekly fib resistance level. NDX is in a clean buy mode with daily uptrend and up ratio oscillator. OEX is a few ticks under its upper weekly fib resistance. If there ever were a time for it to turn this week, it would be on Thursday. SPX is a little behind the djia and oex on reaching for the stars. XAU bounced off of weekly triple switch(white dashes) and lower weekly fib support. TYX daily trend is turning up with a close above the green stair steps. Ratio oscillator is cycle up mode just as the equity indexes are hitting the ceiling.

Stocks of Interest:

CMRhas sellers in the 1.50 to 1.55 area, usually in smaller blocks, and supporting buyers in the 1.40-1.45 area.Tonight's pre -opening has 50 bid at 1.46, and 20 asked at 1.48.This issue quite possibly has the same large buyer as previously seen, waiting patiently to clean up the remaining supply between 1.64 and 1.75-2.00. ASTNwas up 26.3% today in what appears to be a "wall"of volume accumulation past the previous breakout of 3.25 to 3.50 .Close was 3.75 on 3x average volume.Next resistance is 3.75-4,then 5$.

Pivots:

Higher yet with closes above the keylines. This is characteristic of uptrends. Pullbacks to the keyline are bought and then the rally resumes. One day soon support will fail at the keyline. That is something to watch for during the day.
DJI OEX NDX SPX

Momentum Cycles Cones:

Projection Oscillator is maxed out in overbought(trendmode).

Momentum Cycles Update for the open of Friday, March 20, 1998:

Traders were stopped out of the OEX 495 April puts with the suggested 1.50 stop loss from the probable initial entry price.On the other hand,ASTN spiked to 4 and 3/16 intraday on 6x normal volume, before closing at 3 and 17/32.Upper band is 3.75.

Other OEX options traders have become somewhat cautious recently, noting the 78% bullish figures in Consensus{Cadbury 212-249-1131}.The market closed with an overbought +836 tick.

Breadth:

McOsc issues and volume are acting very strangely, unlike anytime in recent history. It is very unlike them to travel horizontally. Cumulative issue and volume worked higher again along with the OEX. CODI is on a sell trend, but the OEX has not broken its uptrend, so no sell yet.

Volatility:

Z Timer inched back into extremely overbought. MVI bands are pinching up and the MVI is heading down towards the sell band again.

RSI, SMI:

SPX RSI is getting very close to its overbought band. It could turn down any day.

Fibonacci Zones:

Upper fib resistance gave way to the DJIA and OEX. SPX is close behind. Note that this is occurring just as the SPX RSI is reaching the std dev overbought band. NDX is a fib band below the others. TYX closed above is daily downtrendline and is closing in on the weekly balance line. XAU is still working the weekly oversold level.

Stocks of Interest:

ASTN oscillating around its upper band.A "wall" of volume, which is often seen with issues attracting higher interest on increasing prices,seems to be present. CMR is oscillating around the 1.54 level, from above and below.A large volume buyer or seller will determine either continued basing or a move to the 1.64-1.75 area.Above 1.75-2.00, this issue will be at 2.50.This will be a major mining company in the future.

Pivots:

Closes above the daily keyline typify the situation along with narrower pivot range for Friday. This fits in with the expanded volatility as the indexes trip off the stops at the pivots.
DJI NDX OEX SPX

Momentum Cycles Cones:

Projection oscillator is in extremely overbought. Cone aperture has narrowed somewhat as implied volatility has dropped a percent from Wednesday.

Momentum Cycles Update for the open of Monday, March 23, 1998:

If one examines the futures charts on page B7 of Investor's Business Daily an interesting observation is immediately apparent.Many of the commodity charts are in cycle mode,that is, they obey periodic oscillation measurable by stochastic and other time/price indicators.That is why we were able to project silver, as a recent example, as showing short term support at 5.5 to 5.8 before the last technical rally once the round number of 6 was broken{tyranny of round numbers commentary, previously}.

Last year, the OEX, in cycle mode,was a weekly tradeable vehicle.Long entries were easily made on periodic pullbacks.This last month's run never achieved the oscillator status we look for in preferred long entries,having stayed saturated in overbought.

In leaving cycle mode in other markets,after a period of digestion, closes above previous highs tend to run the shorts in,and another such situation may be about to occur,which would move the U.S. dollar from cycle to trend mode.The dollar has been making ever smaller oscillations,edging up to the early January high slightly over 101{basis June U.S. dollar index}.Buy stops must be clustered at about 101.2. Two consecutive daily closes above 101.3 would likely bring a short covering panic,rewarding a long entry.Conversely,a close below 99 gives you 98.2.Since the dollar correlates strongly with confidence in U.S equities and bonds, this is one trade to watch.New highs in the dollar have frustrated dollar bulls since January 3,so a resolution to the impasse is due soon.One might go long on 2 consecutive daily closes above 101,with a stop at 100.9.An intraday move below 99 gives a daytrade to the 98.5 -98.2 area.

Copper is having the predicted pullback.A successful retest of the 79 area basis May,and a hold above the 50% stochastic level,may mean this is a new bull trend in the works for this metal.

Looking at the S&P,if we don't pull back this week, the new Roth IRA monies and fear of underperformance by lemming-like money managers may keep us going until the window dressing end of quarter.Price patterns hit a time/price intersection on Friday{see Raff regression comments below}.No OEX trade is suggested for Monday.It is to be noted that many large money pros are reportedly trading with less than half of the trading capital they habitually use in S & P index trading.Why do you suppose?

Trend:

Friday marks a milestone in this long advance. 525 on the OEX is something of significance in that it lies on a Raff Regression channel line whose origin is Dec 94 - Jan 95. In chaos theory, regression channel lines are "attractors" where price is drawn to and where trends have a better than even chance of changing. Intersections of the regression lines improve the odds of a successful price projection even more, as at the blue arrow on 3/20/98. A good book to read up on this subject is "Trading the Regression Channel" by Gilbert Raff. As would be expected, the Projection oscillator in the lower plot is extremely overbought. Now the blue channel is based on data up to the low in Jan 98 and then the blue lines were projected to the right where we have the 3/20 intersection. If we include the data up to 3/20 in the blue channel, the intersection is moved out into next week at about 528 on 3/27 (red arrow).

Breadth:

Issue and volume breadth continued strong into Friday's close. Taking a look at the ADHL(advance, decline, new high, new low) chart we see that conditions are ripe for a trading top. It looked like we almost got one in early March. So far, as the index rises, the new high strength stays strong and the new low strength stays low. Profit taking could always start for other reasons, but from a breadth standpoint we are not seeing a deterioration or divergence in new high strength yet. McOsc is running horizontal in the neutral region as price makes a steady uptrend. What this really reflects is an organized sector rotation designed not to tank the market by unbalancing the breadth readings. What it means is that money that comes out goes right back in along with drawing new money into the game. There seems to be a certain inefficiency at play here with all the money going into betting on a company's performance rather than into new company formation.It seems as if the way valuations are presently the new money could be better placed than in companies whose market capitalization can get clipped in half and billions of dollars lost to a psychological revaluation of price. This must be what tops and crashes are all about. When and if money does not continue to flow in or be immediately rotated, then we should see the new highs deteriorate and the new lows pick up. CODI is going for another tag of the Sell Alert line. It should be obvious that CODI is a better trading range indicator than a trending indicator.That is why we added the trendline indicator to the CODI chart, that is, it is not to be acted upon until the uptrend violation is seen.

Volatility:

We have a surprise on the Z Timer chart. Even though prices moved higher on Friday the Z Timer dropped from extremely overbought to just overbought. This is considered a sell pivot along with a zone crossing. Even the MVI pivoted upward as though a sell were pending. The reason these two indicators are hinting at expiration day and volume in optionable stocks and options was so heavy, the indications have to be suspect.

RSI, SMI:

SPX RSI tends to ramp up and then drop sharply. It is very close to tagging the +2 std dev reversal band. TYX has been ramping down and then rising sharply. It is in the inverse state of the SPX. Stochastic momentum has yet to turn down on the SPX.

Fibonacci Zones:

DOW 9000 is at the top edge of next week's fib resistance zone. 530 is the OEX equivalent in fib zones. That would put the SPX at just under 1150. NDX is a bit weaker as it is not making new highs. TYX is trying to rise off its lows and starts the week in the middle of its weekly fib zones. XAU is looking weaker still into next week.

Stocks of Interest:

ASTNseems to be under accumulation on intraday drops.Former resistance at 3.45-3.50 is presently support.Large block buys were seen at Friday's lows of 11 a.m. , and 2:30 p.m.Close was 3 and 11/16. CMRseems to have some very patient accumulation at the intraday lows in the 1.45-1.50 area.Small blocks bring down the price, and larger buyers buy the dips.Again, a large buyer seen here before may wait until the supply dries up before taking price to 1.64-1.75, then 1.75-2.00.Above that its 2.50.This could happen in one day as before, if this issue is under patient large money accumulation, as the recent breakout implied.Pre-opening bids are 71 at 1.50, 20 asked at 1.54.

Pivots:

Now here we have some rarely seen pivot level configurations. Note how they are skewed to the high side of the keyline. This has the makings of a blowoff. Either we saw it on Friday or it is yet to come.
DJI NDX OEX SPX

Momentum Cycles Cones:

This has been a rather long run of up days without any giveback. Projection oscillator is saturated in trend mode. Bull markets are characterized by right hand translation, i.e. slow ramp up and fast drops. The lower grey and red cones would be intraday targets in the drops.

Momentum Cycles Update for the open of Tuesday, March 24, 1998:

We had posited here for a few weeks the possibility of a CRB double bottom near 221.56 at the 52 week low, in conjunction with important lows in key commodities.The 52 week high in the CRB is 236.08.Today's close was 231.54.The Goldman Sachs commodity index{GNX} was even stronger, up 5.2%,and XAU up 7.81 %.Value buyers of some of the smaller oils selling last week at 25% of their 52 week highs {mentioned here as value buys near the oil spike low}were up as much as 30% today.There is reason to believe that oil producers feeling the pain of inflation-adjusted 50 year lows in the oil price at 12.83 will be more inclined to keep this present agreement to lower production.

In the belief that continued new index highs probably imply a resumption of the bull leg, and that a failure to have 2 successive daily higher closes above the old highs may mean Monday March 23 was a short term top, it's important to keep a record of these highs:DJIA 8913.41,DJT 3652.74,DJU 288.14,NASDAQ 1807.03,NDX 1213.09,SPX 1101.16,OEX 525.35,XMI 922.83.

Two successive daily higher closes above the index levels listed above strongly suggest much higher highs.

In the same way,a strong close above triply tested resistance at 80 in XAU targets much higher prices.

We had a double top on Friday and Monday in the 525.35 area for the OEX.In the DJIA, we had the rare pattern of up over 1% Friday, down over 1% Monday near the upper band.This pattern usually brings at least a test of the 21 day moving average, so we might look for a tag of about 8640.At that point, we might look for a long entry, if the other indicators confirm.In the past, the up/down pattern often has resulted in a tag of the lower 3.5% band within 2 months.The exact top in 1987 started with this same pattern, not to imply any other similarity.

Trend:

OEX regression channel intersection might just turn out to be a change in trend. The Projection oscillator is rolling over in the overbought zone.

Breadth:

CODI is hanging onto the Sell Alert line. McOsc issues are dipping towards the zero line again. On the ADHL chart, new highs decreased to 255 from over 300 last week. New lows increased to 24 from 8 on Friday. These two are headed in the direction of a significant sell signal if their trends develop further.

Volatility:

Z Timer dropped out of overbought on Friday to the neutral line on Monday. MVI continued on a sell pivot upwards. OEX has not broken below its trendlines yet. Analyzing is one thing, trading is another. At some point you have to go with the signals, but follow them with stops(price and time) if there is no followthrough.

RSI, SMI:

See charts, not much change.

Fibonacci Zones:

Most are starting the week closer to the weekly balance line(red dashes) than where they ended on Friday. XAU is the standout in the Fib Zones.
DJI NDX OEX SPX TYX XAU

Stocks of Interest:

ASTNhas obvious resistance at 4$.A close above this level for several days is neccessary to keep short term momentum going.Fundamentally, the VWAP system is set to go by mid-April, as ASTN's president has projected.CMRhad a big 70000 block trade today, which we think is the large buyer who has been accumulating on weakness.Pre-opening bids show 50 bid at 1.45, 12 asked at 1.49.3 successive daily higher closes above 1.64, especially on increasing volume probably project 2.00-2.50.If CMR rebases in the 1.35-1.45 area,the eventual result will be the stock in a smaller number of larger pockets.It is to be noted that the recent 100% sulphide region encountered at MASKWA is almost always associated with large nickel deposits.

Momentum Cycles Cones:

Monday was an average down day as far as the OEX is concerned. Projection oscillator is rolling over.

Pivots:

DJIA closed below the keyline AND below its hourly trendline(cyan). This does not bode well for tomorrow. It could rally up to the keyline or the hourly line and then sell off again. OEX and SPX both closed below the keyline, but were pretty much sitting on their hourly trendline. NDX was the stronger by closing above its keyline and above its hourly trendline.

To quote from the Momentum Cycles Update for the open of Tuesday, March 24, 1998:

"In the belief that continued new index highs probably imply a resumption of the bull leg, and that a failure to have 2 successive daily higher closes above the old highs may mean Monday March 23 was a short term top, it's important to keep a record of these highs:DJIA 8913.41,DJT 3652.74,DJU 288.14,NASDAQ 1807.03,NDX 1213.09,SPX 1101.16,OEX 525.35,XMI 922.83.

Two successive daily higher closes above the index levels listed above strongly suggest much higher highs."

Momentum Cycles Update for the open of Wednesday, March 25, 1998:

New highs today in some of the mentioned indices, including NASDAQ,SPX,OEX,AMEX,and DJU.As new highs above the previous Friday-Monday high are confirmed by another successive daily higher close,the path of least resistance is still up.Those who wish to try the long side for OEX calls should use the OEX pivot chart to buy pullbacks, but realize this hyper-extended run is unusual in price -time duration.Risk on OEX longs, if taken, should be less than 50% of the initial entry price.For risk management, readers may prefer,if entering on an intraday pullback, to use a 1.50$ stop instead.

Personally, we as writers find it difficult to enter the long call side wholeheartedly until a true oversold state occurs.Oversold states have only been temporarily repealed!

Trend:

On an end of day basis, if the OEX regression channels are updated to include Tuesday's data, then the intersection of the blue and grey channels is pushed out to 3/27 or 3/30 at about 530.XX. Using the significant turning points of the past and using the line extensions leaves the intersection at 3/23/98. On the intraday equity indexes, buying appears to reassert itself on pullbacks to the hourly trendline, see pivots below.

Breadth:

McOsc of issues is hanging tight in the neutral range as prices continue their trek upwards inside the regression channel. This is supported well by strong advance decline issue and volume breadth as well as new highs and new lows. Even though new highs have peaked, they have not deteriorated enough, nor have the new lows increased enough to precipitate a sell mode. CODI

Volatility:

Don't let the polynomial look-ahead line overlaid on the Z Timer scare you. This is sort of for perspective to show the 3 humps in the overbought zone. The polynomial can only see the past and not an upcoming rally. Z Timer is deadcenter neutral and could go either way from here. MVI is tagging the upper band preparing for another buy signal by pivoting downward.

RSI, SMI:

No new comments here.

Fibonacci Zones:

Upper weekly Fib zones are being challenged again. Ratio oscillators are maxed out.
DJI NDX OEX SPX TYX XAU

Stocks of Interest:

ASTN has obvious resistance at 4, where sellers come out in force, but buyers are found near 3.75.We need closes above 4 on good volume.CMRappears to be weaker from the VA% on thr chart and the close below the middle trading band,however,listed offers to sell up to about 1.60 number about 27000 total.We posit a big buyer waiting to scoop up the supply, last seen yesterday buying 70000.

Pivots:

Closes for 3/24 and opens for 3/25 are above the keylines. Indexes are a bit above the hourly trendlines which are pointing upward. The expectation here would be for prices to pull back to the keylines and or hourly trendlines before advancing further.
DJI NDX OEX SPX

Momentum Cycles Cones:

A regression channel has been added to the MCcones dating back to the start of this run on 2/5/98. The combination of the regression channel and probability cones might give us a clue as to where prices will range the next day. A break outside of the regression channel is serious business.

a sell is because of the unexpected rise in the VIX on Friday. Since that was an expiration day and volume in optionable stocks and options was so heavy, the indications have to be suspect.

RSI, SMI:

SPX RSI tends to ramp up and then drop sharply. It is very close to tagging the +2 std dev reversal band. TYX has been ramping down and then rising sharply. It is in the inverse state of the SPX. Stochastic momentum has yet to turn down on the SPX.

Fibonacci Zones:

DOW 9000 is at the top edge of next week's fib resistance zone. 530 is the OEX equivalent in fib zones. That would put the SPX at just under 1150. NDX is a bit weaker as it is not making new highs. TYX is trying to rise off its lows and starts the week in the middle of its weekly fib zones. XAU is looking weaker still into next week.

Stocks of Interest:

ASTNseems to be under accumulation on intraday drops.Former resistance at 3.45-3.50 is presently support.Large block buys were seen at Friday's lows of 11 a.m. , and 2:30 p.m.Close was 3 and 11/16. CMRseems to have some very patient accumulation at the intraday lows in the 1.45-1.50 area.Small blocks bring down the price, and larger buyers buy the dips.Again, a large buyer seen here before may wait until the supply dries up before taking price to 1.64-1.75, then 1.75-2.00.Above that its 2.50.This could happen in one day as before, if this issue is under patient large money accumulation, as the recent breakout implied.Pre-opening bids are 71 at 1.50, 20 asked at 1.54.

Pivots:

Now here we have some rarely seen pivot level configurations. Note how they are skewed to the high side of the keyline. This has the makings of a blowoff. Either we saw it on Friday or it is yet to come.
DJI NDX OEX SPX

Momentum Cycles Cones:

This has been a rather long run of up days without any giveback. Projection oscillator is saturated in trend mode. Bull markets are characterized by right hand translation, i.e. slow ramp up and fast drops. The lower grey and red cones would be intraday targets in the drops.

Momentum Cycles Update for the open of Tuesday, March 24, 1998:

We had posited here for a few weeks the possibility of a CRB double bottom near 221.56 at the 52 week low, in conjunction with important lows in key commodities.The 52 week high in the CRB is 236.08.Today's close was 231.54.The Goldman Sachs commodity index{GNX} was even stronger, up 5.2%,and XAU up 7.81 %.Value buyers of some of the smaller oils selling last week at 25% of their 52 week highs {mentioned here as value buys near the oil spike low}were up as much as 30% today.There is reason to believe that oil producers feeling the pain of inflation-adjusted 50 year lows in the oil price at 12.83 will be more inclined to keep this present agreement to lower production.

In the belief that continued new index highs probably imply a resumption of the bull leg, and that a failure to have 2 successive daily higher closes above the old highs may mean Monday March 23 was a short term top, it's important to keep a record of these highs:DJIA 8913.41,DJT 3652.74,DJU 288.14,NASDAQ 1807.03,NDX 1213.09,SPX 1101.16,OEX 525.35,XMI 922.83.

Two successive daily higher closes above the index levels listed above strongly suggest much higher highs.

In the same way,a strong close above triply tested resistance at 80 in XAU targets much higher prices.

We had a double top on Friday and Monday in the 525.35 area for the OEX.In the DJIA, we had the rare pattern of up over 1% Friday, down over 1% Monday near the upper band.This pattern usually brings at least a test of the 21 day moving average, so we might look for a tag of about 8640.At that point, we might look for a long entry, if the other indicators confirm.In the past, the up/down pattern often has resulted in a tag of the lower 3.5% band within 2 months.The exact top in 1987 started with this same pattern, not to imply any other similarity.

Trend:

OEX regression channel intersection might just turn out to be a change in trend. The Projection oscillator is rolling over in the overbought zone.

Breadth:

CODI is hanging onto the Sell Alert line. McOsc issues are dipping towards the zero line again. On the ADHL chart, new highs decreased to 255 from over 300 last week. New lows increased to 24 from 8 on Friday. These two are headed in the direction of a significant sell signal if their trends develop further.

Volatility:

Z Timer dropped out of overbought on Friday to the neutral line on Monday. MVI continued on a sell pivot upwards. OEX has not broken below its trendlines yet. Analyzing is one thing, trading is another. At some point you have to go with the signals, but follow them with stops(price and time) if there is no followthrough.

RSI, SMI:

See charts, not much change.

Fibonacci Zones:

Most are starting the week closer to the weekly balance line(red dashes) than where they ended on Friday. XAU is the standout in the Fib Zones.
DJI NDX OEX SPX TYX XAU

Stocks of Interest:

ASTNhas obvious resistance at 4$.A close above this level for several days is neccessary to keep short term momentum going.Fundamentally, the VWAP system is set to go by mid-April, as ASTN's president has projected.CMRhad a big 70000 block trade today, which we think is the large buyer who has been accumulating on weakness.Pre-opening bids show 50 bid at 1.45, 12 asked at 1.49.3 successive daily higher closes above 1.64, especially on increasing volume probably project 2.00-2.50.If CMR rebases in the 1.35-1.45 area,the eventual result will be the stock in a smaller number of larger pockets.It is to be noted that the recent 100% sulphide region encountered at MASKWA is almost always associated with large nickel deposits.

Momentum Cycles Cones:

Monday was an average down day as far as the OEX is concerned. Projection oscillator is rolling over.

Pivots:

DJIA closed below the keyline AND below its hourly trendline(cyan). This does not bode well for tomorrow. It could rally up to the keyline or the hourly line and then sell off again. OEX and SPX both closed below the keyline, but were pretty much sitting on their hourly trendline. NDX was the stronger by closing above its keyline and above its hourly trendline.

To quote from the Momentum Cycles Update for the open of Tuesday, March 24, 1998:

"In the belief that continued new index highs probably imply a resumption of the bull leg, and that a failure to have 2 successive daily higher closes above the old highs may mean Monday March 23 was a short term top, it's important to keep a record of these highs:DJIA 8913.41,DJT 3652.74,DJU 288.14,NASDAQ 1807.03,NDX 1213.09,SPX 1101.16,OEX 525.35,XMI 922.83.

Two successive daily higher closes above the index levels listed above strongly suggest much higher highs."

Momentum Cycles Update for the open of Wednesday, March 25, 1998:

New highs today in some of the mentioned indices, including NASDAQ,SPX,OEX,AMEX,and DJU.As new highs above the previous Friday-Monday high are confirmed by another successive daily higher close,the path of least resistance is still up.Those who wish to try the long side for OEX calls should use the OEX pivot chart to buy pullbacks, but realize this hyper-extended run is unusual in price -time duration.Risk on OEX longs, if taken, should be less than 50% of the initial entry price.For risk management, readers may prefer,if entering on an intraday pullback, to use a 1.50$ stop instead.

Personally, we as writers find it difficult to enter the long call side wholeheartedly until a true oversold state occurs.Oversold states have only been temporarily repealed!

Trend:

On an end of day basis, if the OEX regression channels are updated to include Tuesday's data, then the intersection of the blue and grey channels is pushed out to 3/27 or 3/30 at about 530.XX. Using the significant turning points of the past and using the line extensions leaves the intersection at 3/23/98. On the intraday equity indexes, buying appears to reassert itself on pullbacks to the hourly trendline, see pivots below.

Breadth:

McOsc of issues is hanging tight in the neutral range as prices continue their trek upwards inside the regression channel. This is supported well by strong advance decline issue and volume breadth as well as new highs and new lows. Even though new highs have peaked, they have not deteriorated enough, nor have the new lows increased enough to precipitate a sell mode. CODI

Volatility:

Don't let the polynomial look-ahead line overlaid on the Z Timer scare you. This is sort of for perspective to show the 3 humps in the overbought zone. The polynomial can only see the past and not an upcoming rally. Z Timer is deadcenter neutral and could go either way from here. MVI is tagging the upper band preparing for another buy signal by pivoting downward.

RSI, SMI:

No new comments here.

Fibonacci Zones:

Upper weekly Fib zones are being challenged again. Ratio oscillators are maxed out.
DJI NDX OEX SPX TYX XAU

Stocks of Interest:

ASTN has obvious resistance at 4, where sellers come out in force, but buyers are found near 3.75.We need closes above 4 on good volume.CMRappears to be weaker from the VA% on thr chart and the close below the middle trading band,however,listed offers to sell up to about 1.60 number about 27000 total.We posit a big buyer waiting to scoop up the supply, last seen yesterday buying 70000.

Pivots:

Closes for 3/24 and opens for 3/25 are above the keylines. Indexes are a bit above the hourly trendlines which are pointing upward. The expectation here would be for prices to pull back to the keylines and or hourly trendlines before advancing further.
DJI NDX OEX SPX

Momentum Cycles Cones:

A regression channel has been added to the MCcones dating back to the start of this run on 2/5/98. The combination of the regression channel and probability cones might give us a clue as to where prices will range the next day. A break outside of the regression channel is serious business.