MomentumCycles

To quote from the Momentum Cycles commentary for the open of Thursday,June18,1998:

"Weak bonds,strong stocks again Wednesday,with help from overseas markets,up here over 200 DJIA points intraday,more from intraday Monday or Tuesday.Very fast move down in bonds and up in stocks, so a bit of profit taking in bond short positions{remember we prepared you for this with our prescient FNM -bonds non-confirmation comments before the recent bond selloff!}, and equity long positions wouldn't be unexpected.A retracement after expiration would also agree with a secondary money flow low about June 24 prior to a month end pension fund driven rally the last week of the month into July 2."

Momentum Cycles Commentary for the open of Friday, June 19, 1998:

Nice daytrade possible on the predicted bond rally from the highly short term oversold bond position discussed on the above commentary.Open Thursday at 57.25, high late afternoon into the close range 56.89-56.93.Sometimes positions get so highly oversold or overbought that the next day gives an obvious pop in the opposite direction.Stocks also made highs at 9:45,11:30, and 2:15,with a general down bias commensurate with profit taking after a gonzo move and general expectations for a Thursday.1056 up and 1884 down on the NYSE.Normal seasonals after Friday expiration would see a retracement into the money flow low due about June 24.

XAU flirting with STOCHASTIC 20 crossover above 20, with a close right on the 20 line.Firm closes above 20 often lead, if on increasing volume, to a move to at least the 21 day moving average, if not the upper 3.5% trading band.

Trend:

ADHL retains its buy mode. NHNL is improving. OEX regression channel is staring at 543 on the upside and 530 on the downside. DJI is stuck below its 21 & 50 day moving averages. Its Stochastic Momentum oscillator is deeply oversold. Snapshot gives a mixed picture with the PREM cycling between fairvalue and buy programs all day, but yet the TICK was cycling between Zero and minus 600. Daytraders were having a field day with the futures. Even though there was not much overall movement, the buy the -600 and sell the zero TICK can pump out the cashflow.

Astrocast:

For the 19th. Mildly negative astro energy will lay off at 10:26 am, 11:26 am EDT, 11:46 am EDT. This last one might be a morning low. On the US chart at 4:23 is a mildly positive influence. So watch out for the afternoon.

Fibonacci Zones:

NDX is resting in the upper weekly fib resistance. Other equity indexes are hanging just below the weekly balance line(red dashes). A move up through there Friday could set off some buy stop orders that carry the indexes higher.

DJI NDX OEX SPX TYX XAU

Breadth:

McOsc issue and volume have ticked downward to test the zero line. Any positive strength tomorrow should shoot these oscillators upward drawing in more institutional buyers. It doesn't hurt to monitor the XII and NHB for institutional participation. XII is the Institutional index, and the NHB is the NYSE High Beta index. The mantra is "don't fade the beta". CODI created a strong buy trend on Thursday by dropping significantly. NYA breadth was negative after only two positive days, characteristic of the whipsaws of expiration.

Volatility:

Zone Timer could not be more neutral. MVI's are also quite neutral looking. VIX is gradually decreasing and is hinting at more upward movement in equities.

Momentum Cycles Cone:

The OEX is still centered in the short term regression channel with support and resistance at crash down and crash up levels. Look at the center set of cones for targets. 548 appears to be within reach on a strong day. The projection oscillator has crossed over the 50% line increasing the odds of upward movement on Friday.

Pivots:

The OEX pivot chart is mildly positive with an anticipated open above the hourly and the Keyline. Most importantly, the narrow price range on Thursday sets up a narrow pivot range on Friday. This creates the conditions for a GONZO type of move as trades are tripped off at the Support or Resistance levels. This has the potential to be a very wild Friday.

RSI, SMI:

Thursday saw that consolidation pause from the big move on Wednesday. The RSI and SMI charts look constructive for a continued up move.

Stocks of Interest:

ASTNnow has support at 2 and resistance at 2 1/2.This is an issue for long term holders, not a trade.The potential if their trading systems go in at any major exchange is a 6 to 10$ stock. CMRslowly cleaning up sellers in the 1.00 to 1.30 area.We expect a favorable sales agreement on the cobalt at Werner Lake sometime within several momnths, as this is the logical way to deal with the richness of the deposit and the lack of world supply of this % quality.

OEX Trades:

Thursday was a go nowhere day for the equity markets and the options behaved accordingly (OEWFD, OEWFG, OEWGD, OEWGF). The OEX mechanical model is holding the same postions in all models since they have not been stopped out by time or signal reversal. These models are reference models and real trades should use the 1.5 pt stop and 50% and 100%+ profit taking levels referred to before. The expiration week or gamma trades are an exception since the dynamics are quite different than at other times of the month and it is not uncommon to have multihundred point moves in out of the money options when those who have naked shorts on scramble to cover themselves. On Friday it is possible to witness out of the money options in the direction of the trend make a double or more as they come into the money. It is also possible to see them evaporate to zero as the index stops short of bringing them into the money. You really have to give some thought to risk and the type of trader you are to trade the expiring options or the next month out. We typically experience a pop on the NDX and SPX settlement Friday morning with a lull into midday and then a rally into the close. If you have a live system and catch that midday to close move, up or down, then you are on to something that can be exciting and rewarding.

Momentum Cycles commentary for the open of Monday, June 22, 1998:

The opening pop in OEX on Friday,June 19th, provided a nice exit point for those who did not exit Thursday on the violation of up channel or parabolic stops.The mechanical models in the OEX trades section at the very bottom of the page do not make allowance for common sense money management.When the DJIA ran up over 250 points intraday in two days last week due to squaring of positions prior to options and futures expiration, a logical short term profit taking point was reached.Global markets rising on average between 3 1/2% to 5% in one day provided a confirmation of this short term overbought position.The retracement at the end of the week was therefore to be expected.

TIAA -CREF payday is June 24,and this is often coincident with an OEX money flow low prior to new month seasonal reinvestment.The period running up to the July 4 holiday often has a bullish bias.

XAU has been declining along the lower channel of the 12.5% trading band in a pattern similar to the December 97 lows, prior to a STOCHASTIC 20 crossover rally.Momentum of 7 days versus 35 and 5 days versus 21 on XAU has reversed to the upside.Some of this may be related to the expiration of futures.An XAU and gold and silver low is due in the June 22-23 time period, so we should be alert for a week long countertrend rally in XAU in approximately this time frame.

Trend:

DJI Stochastic Momentum is extremely oversold and can remain there in a downtrend. ADHL remains in a Buy mode although the trend is in a horizontal trading range. NHNL is in a corrective/consolidative mode. OEX is sandwiched between the red and blue (96 & 95) regression channel lines.

Astrocast:

Astrocast has been forecasting multi hundred point moves in the DOW. We are getting them.

Fibonacci Zones:

Next week starts with most indexes opening at the weekly balance line(red dashes) and ratio oscillators either oversold or at the 50% retracement level.

DJI NDX OEX SPX TYX XAU

Breadth:

McOsc is flirting with the zero line. NYA breadth was negative all day on Friday. CODI is in the center of the indeterminate region. Flow Rate shows an afternoon rally in breadth but the price did not move significantly in the broader indexes. The DOW drop cast fear over other stocks. Snapshot shows we had another one of those bearish days with the TICK cycling below zero.

Volatility:

Zone Timer moved slightly above zero and the MVIs are somewhat indeterminate.

Momentum Cycles Cones: Cone 1 shows that expiration Friday was a nonevent as far as the OEX goes as it was confined to the inner cones on both sides of the keyline. Cone 2 is for Monday. The keyline and regression line are still coincident. That might have been a subtle clue for expiration.

Pivots:

Monday OEX pivots have a wider range than Friday. The narrow Friday range did not produce the expected Gonzo move. Perhaps too many were watching rather than trading the S&P100 as the price action was more dramatic in the DJIA index and options.

RSI, SMI:

RSIs are neutral looking. SMI for XAU and TYX are oversold. SPX SMI is overbought longer term.

Stocks of Interest:

ASTNnow has buyers at 2 and resistance at 2 1/2.We expect one or more of their trading systems to be placed at a major foreign exchange,as well as IPO spinoffs of one or more divisions to reinvigorate the share price. CMRslowly working through sellers in the lower basing range between 1.10 and 1.30.A cobalt sales agreement would be the next logical step, as the ball mill is done, and raw material is being stockpiled for the transition to finished product.

OEX Trades:

Mechanical models retain the July positions even though the 1.5 stops for real trades have been activated.Those who followed their instinctive and our common sense advice to take profits after the 250 point 2 day pop did very well. Another entry may be possible in the next few weeks. The June calls for interest sake show the risk of trading them this close to expiration without due dilligence. No new positions are recommended for Monday. The preferred setup would be for the Zone Timer above to be in one of the outer zones and the MVI to be near a buy or sell band. Here are the OEWFD, OEWFG, OEXGD, and OEXGF charts.

Momentum Cycles Commentary for the open of Tuesday, June 23, 1998:

After a triple expiration,sometimes several days are neccessary to finish the results of unwinding positions taken prior to the expiration.The next big event is the end of the quarter.The period before the July 4 holiday is generally bullish from mid to end week of post expiration week, which coincides with the time of TIAA -CREF pension fund reinvestment.

XAU still playing footsie with the STOCHASTIC 20 crossover above 20 on good volume.Now XAU is below the 20 line again.A low and rally in this index is due in this timeframe for about 1 week, most likely about June 23 as a low and the end of June as a high.

Trend:

OEX continues consolidating between two long term channels. Projection oscillator is neutral. ADHL retains its buy mode. NHNL is gradually improving with the 5 day exponential about to cross above the 19 day exponential. An additional crossing above the 0% line would raise confidence levels about a summer rally. Just when everyone is lulled to sleep with a dull market a few skyrockets will be set off. DJI stochastic momentum is oversold and has not turned up yet.

Breadth:

NYA breadth was marginally positive, but not of the trend inducing strength. CODI is touching the Sell Alert Band but the OEX is in the middle of its channel and there has been a minor trendline crossover. It is too indecisive to make a call. Snapshot shows a pretty even balance between plus TICK and minus TICK throughout the day. CNBC had another bearish guest and as usual the frontrunners tanked the DOW prior to his appearance. Here is the McOsc chart.

Volatility:

Zone Timer is slightly overbought and MVI is close to the sell band. Neither are developed enough to get excited yet. The caution here is we are entering a seasonal low in the next few days, which could also be at current levels +,-. Should we get higher prices into July then, current prices will look relatively low.

Momentum Cycles Cone:

Keyline is still pretty close to the center regression channel line and the projection oscillator is tracking at the 50% level. We don't hear too much about Flex options anymore. Those were designed for institutions that needed to hedge up until the end of the month or quarter. They are called Flex because they have custom strikes and expirations. It would not be a surprise to see the OEX move significantly before the end of June.

Pivots:

Post expiration Monday was pretty much a nonevent day for the OEX just as Expiration day was. The outlook for Tuesday is just as neutral. This will only last a few days as the market abhors neutrality with declining volume. Institutional managers are playing a performance game. The next big move is an end of quarter, pre-holiday, pre/post payroll period. The big guns may be saving their cash for end of quarter window dressing and maximum leaverage effect by timing their purchases more judiciously. The guess would be for the creation of some upside momentum before the week is over.

Fibonacci Zones:

Equity indexes started the week on the weekly balance line and did not budge except for the NDX which climbed into the upper weekly fib resistance and pulled its Ratio oscillator into the overbought zone.

DJI NDX OEX SPX TYX XAU

RSI, SMI:

RSI looks neutral, SMI is overbought looking for the SPX, oversold for the XAU and TYX.

Stocks of Interest:

ASTN is awaiting news on any of its various initiatives to place trading systems in various exchanges,and do spinoffs of its various divisions.When news of this sort is announced ,from whatever trading low is established, a run towards the 4$ area, where major resistance came in before,is to be expected.ASTN has plenty of cash in the treasury to make aquisitions as well. CMR has, as of Monday noon,9000 asked at 1.10,3000 asked at 1.19,3000 asked at 1.20,3000 at 1.30,5000 at 1.45, and 5000 at 1.65.28,000 bought could gap this to 1.65,which is 2 days of good trading. At this link Plans for the MASKWA nickel mine are progressing,with some hints in this announcement as to size and profitability.We should see some sort of projections on the cobalt production at Werner Lake fairly soon.

OEX Trades:

All of the mechanical OEX positions, OEWGD, OEWGF, were closed with end of day data today (AM tomorrow).{ Our actual advice last Wednesday was to close them early into strength on the +250 point 2 day runup.} The mechanical model closure was triggered by a momentum failure rather than holding time. It is very possible that new trades will be activated in a few days as June 24, 25 is targeted by cycle software as a high energy date. Here is the OEXTRADES summary since January 1,1998.

Momentum Cycles Commentary for the open of Wednesday, June 24, 1998:

In a trending market, CODI can give premature OEX sell signals.In the recent multi month trading range market,it has been superb{check the buys and sells on the CODI chart!}.Normally the CODI will make a thrust into the BUY zone in this time period of the month.Instead we are in the high risk for longs area {sell area}.In short, the CODI position contradicts the normal tendency of the monthly cycle,which often sees the 18- 19th day as a low.

If we are about to blast off into new highs all around,CODI can be ignored,except for brief one or two day pullbacks that this indicator will signal, which will quickly be followed by strong rallies to higher highs.The jury is still out on this.Notice,in addition, the overbought volatility related indicators in the volatility section.

In a severly uptrending market, declines are quick and short,even when signalled by numerous nonconfirmations.

Since May,however ,many traders have been selling rallies profitably.We've been able to trade both sides of the fence.

Perhaps Tuesday's news of a maximum 15% cap gains tax on equities held over a year overwhelmed the rally scalpers.Maybe Microsoft's win on the court appeal and run to alltime highs scared some tech shorts.

Thankfully, both those who sold last Wednesday's 250 point 2 day spike as advised, or those who held the mechanical model long position and sold Tuesday did quite well.So not being sure of a new OEX position here is acceptable.

XAU barely poked its head above the 20 STOCHASTIC 20 level again, but on poor volume.ABX ,for instance,traded only 868 K.Time cycles have this week as an XAU rally, and certainly its tested the lower 60's quite a few times.Take out the lows, however,and its catch the falling knife again with this index.

Trend:

ADHL remains on its buy mode. NHNL continues to improve with new highs and lows almost equal on Tuesday. Ideally we would like to see the 5% cross above the 19% and the NHNL cross above zero. This would be confirmation of the trading range breakout above 1132 on the SPX. The odds are high that this will occur over the next week and a half. OEX closed above the 1995 blue channel line as the projection oscillator points upward. There is a downward sloping resistance line a few ticks above Tuesday's close. It appears that price and breadth momentum may be sufficient to blast through nearby resistance in the coming days. DJI has some work to overcome the 21 and 50 day averages. It is starting from a deeply oversold stochastic momentum oscillator.

Astrocast:

The astrocast sees upward DOW prices into the end of the month. An updated chart will be available once the astrocaster returns from his beach vacation this weekend.

Breadth:

NYA breadth was positive all day which is encouraging even though declines were pushing on the magic 1200 level. The picture would be much more convincing if the declines were below 1000. Nevertheless, the McOsc volume has finally crossed above the McOsc issues and closed in positive territory. This will turn the Volume Summation upward providing support to the issue oscillator as it moves above the zero line. This is looking more like sustained rally material that could punch above the 548 OEX resistance level. The Sell Alert flags are waving now that CODI has dropped cleanly into that region. It can remain there as price trends out of the trading range. Flow Rate shows the morning rush into upticks and the "distributive" period in the afternoon with a rising index with TICK spending time below zero. The Net Flow Rate was above zero all day and that is what is ultimately important.

Volatility:

The Zone Timer jumped inside the Extremely Overbought zone and the MVI is clearly inside the Sell Alert levels of the 30% and Sell Band. The VIX, implied volatility level is below the level at which reversals have occurred during the second quarter trading range. However, rising markets, new trending mkts, are accompanied with a declining implied volatility, so we need to wait for a reversal in these two indicators so we do not prematurally enter put positions. If you are still holding calls from last week, they are now deep in the money and will track with a delta of 1 or dollar for dollar with the index. That is an enviable position to be in as we enter this positive seasonality period. The scary part is this is occurring with Sell Alerts flashing.

Momentum Cycles Cones:

Cone 1 shows we had a strong upday as the high stopped at the upper edge of the black dotted cone. Cone 2 shows an average day will take the oex to 548.5 to 550 on the inner cone. That would be right into the second quarter range channel resistance shown on the CODI chart above and on this chart by the blue and black resistance lines. The projection oscillator is not saturated yet in overbought.

Pivots:

OEX climbed above R1, R2, R3 in a strong trending fashion. The Virtual Timing mirror gave an official crossover on 6/22 and remained in a strong confirming trend mode all day on 6/23. Wednesday starts with the OEX above the Keyline and way above the hourly trendline. Such moves are bound to retrace somewhat as overhead resistance is encountered. Unless of course John Bollinger is correct and we are about to see a widening of the trading range by raising the ceiling. This is somewhat disturbing in that the OEX Mechanical models below exited calls into this strength per yesterday's instructions. It also comes at a time when positive seasonality should be kicking in. This is a most interesting juncture in price and time.

Fibonacci Zones:

OEX, SPX indexes jammed up to the upper weekly fib resistance. NDX is pushing on the monthly fib resistance. DJI is a bit behind. Ratio oscillators are reaching for overbought and have room to go yet, except for the NDX which is there already. If a new trend mode is beginning then the Ratio oscillators can trend in overbought for a period of time, say until after July 7th.

DJI NDX OEX SPX TYX XAU

RSI, SMI:

RSI's are neutral looking for XAU, TYX, and SPX. SMI's are oversold for XAU and TYX, and are overbought for SPX.

Stocks of Interest:

ASTN rose 22% today on good volume.Long term believers in the ASTN trading systems found prices recently near 2$ attractive.Resistance was found near 2 3/4. CMR slowly eating up supply near 1.10,next level 1.20,with about 25000 asks up to 1.65.This is the only North American primary cobalt producer.Drill results from BINCO later this year may reveal an economic deposit in addition to the recently proposed MASKWA nickel mine,which is apparently going to be quite profitable.

OEX Positions:

The mechanical models exited all positions, OEWGD, OEWGF, on Tuesday per the commentary for Monday close - Tuesday open. Exit prices in the model are theoretical and real prices are sometimes better, sometimes worse. This time real available exit prices were much better. The OEX Trades shows the recent summary of mechanical trades that started on 1/2/98. Fortunately the Tuesday exits were into a momentum spike. Unfortunately, better index prices may be ahead, which may or may not translate into better option prices, that is why we run both the mechanical models and the "discretionary" systems using the above commentary. As far as the discretionary trades go, profits were taken at the first drop of 1.5 from the high last week which coincided with a 50% gain. Whether anyone still holds these positions, or partial positions is strictly up to the individual. We are entering the positive seasonality period and it appears to be starting at the long end of the entry period of 3 to 5 trading days before the end of the month. Above indicators are entering the overbought, sell alert levels, which can also be the beginning of a new trend period. Interesting trading is ahead. Just remember that time decay will be accelerating exponentially in the July options and some savy traders do not hold them beyond the first trading week of July.

Momentum Cycles for the open of Thursday, June 25, 1998:

It appears the cycle low {money flow low }of June 24 was off by 2 days{it was the 22nd}.Possibly front running by big traders ahead of end of quarter buying and TIAA-CREF payroll deposit on the 24th.

Some OEX retracement due to CODI position and the volatility based charts{see below}between Thursday and Monday is probable.OEX new highs here, and NASDAQ relative strength versus DJIA says new highs in NASDAQ could happen.

XAU poked its head below the 20 level of the STOCHASTIC 20 again,on low volume.This index is presently acting like a blushing bride, unwilling to be seen making a committment for a high volume run above STOCHASTIC 20.

Trend:

ADHL remains on a buy. NHNL has turned positive and the 5 day has closed above the 19 day exponential. New highs better keep increasing here. The negative is that new lows also increased today over yesterday. DJI closed above its 21 day average on the way to the 50 day where it might encounter more resistance at the 9000 level.

Astrocast:

Higher prices into the end of the month.

Breadth:

NYA breadth was good but not without worry. End of quarter dressing is keeping the declines near 1200. McOsc issue and volume are looking good and the volume summation has turned up confirming the upward move in the indexes. CODI made a sell pivot, maybe just for a weak Thursday, suggests caution, but there is still the possibility of an uptrend mode for a week. Snapshot shows the afternoon was technically weaker than the morning, and perhaps there was some pre-Thursday paranoia occurring.

Volatility:

Zone Timer made a slight bend into trend mode. Sustained trend would see it track sideways in the overbought zones. Retracement would see it drop back towards the neutral to oversold zones. This bears watching over the next few days. MVI made a sell pivot in the vicinity of the sell band and 30% zone level. This is further hint that the OEX calls are in jeopardy. Seasonality filter makes it difficult to recommend puts yet.

Momentum Cycles Cones:

Projection oscillator is overbought. Resistance was taken out on Wednesday. Cone 1 shows we had another 1+ std dev move. These don't occur too often. Usually they are seen in blow off tops and yes when breaking out of consolidations. As the DJI moves to or across the 9000 level the second stage booster rocket mentioned a few days ago here will ignite. Cone 2 has the regression channel redrawn because we have new highs.

Pivots:

OEX closed above the keyline and the hourly trendline. Keyline is stepped higher again. Thursdays have been correction day in most weeks this year.

Fibonacci Zones:

Oh joy, OEX and NDX are pushing on upper fib levels. SPX and DJI are a bit behind. XAU and TYX are lying in wait. If history is prologue, the XAU will start to rise as the equities make a top and then it will collapse with all equities.

DJI NDX OEX SPX TYX XAU

RSI, SMI:

XAU, TYX are comatose. SPX RSI is showing strength at the upper band. It doesn't have to turn down here immediately if the spx enters a new uptrend. The spx rsi can track the upper band for a few days. SMI spx is gaining momentum. XAU and TYX Stochastic Momentum are oversold and waiting their turn to rise. XAU will probably rise by default when everything else gets to max evaluation. Take a look at the 40 month rate of change chart and shudder. We want to be in puts before this thing turns down.

Here is the swing machine showing the probabilities of more upside and the timetable for a reversal.

Stocks of Interest:

ASTN, along with other techs, seems to have been bought recently near the $2 level and closed Wednesday near the $3 level, with an intraday high of $3.25. These lower priced issues are very volatile and have a tendency to pick up fast buying or selling waves. Because of its low price, ASTN is a speculation. They do have a lot of money in the treasury, compared to the market cap, and intend to grow bigger, either through spinoffs, acquisitions, or growth. CMR still basing in the $1.00 to $1.10 area. If we can get through $1.10, the next area of asks is $1.20. There are not a lot of asks between $1.20 and $1.65.The recent link to the CMR site shows the timetable for the first of their economically viable mines.

OEX Trades:

No new postions have been recommended for Thursday. One discretionary and one mechanical profit taking day(s) have been recommended. If anyone is still holding the OEWGD and OEWGF, congratulations on your fortitude. This has been an excellent excercise in comparing June calls vs July calls. It also shows what happens to a call option when it goes deep in the money. Note the straight up line on the OEWGD. This is every option buyers dream of buying a call or put and having it go deep in the money so it moves point for point with the index. Pre holiday, pre payroll, end of quarter window dressing, performance manipulation by fund managers who are paid on changes in net asset value, might just make these options go higher yet.

Momentum Cycles Commentary for the open of Friday, June 26, 1998:

Liquidation Thursday it was, as discussed yesterday on the Wednesday p.m. commentary.Early morning high, as often seen near end week after a good run from Monday- traders leaving at 11 a.m. for the weekend, perhaps.8700 to 9000 in less than a week pays for quite a weekend,even a 5 day weekend!

NASDAQ relative strength versus DJIA negative, and bonds gained momentum as the OEX lost it, in a continuation of the recently discussed pattern.

XAU STOCHASTIC 20 slightly above 20 again, flirting with a breakout or breakdown.Good volume on a strong upday is needed to break out of this narrowing pattern.Volatility breakout soon.

DJIA RSI 15 and STO 15 have been declining since the rally topped internally in FEBRUARY{yes, FEBRUARY!}.They are now at the top of the declining channel.A breakout above that declining channel on necessary good volume and breadth might very well signal this rally has good legs into much of July.

Trend:

ADHL remains on a buy. NHNL is shaky as both new highs and new lows are increasing. New lows must be increasing because of portfolio liquidation of the losers. DJI is sandwiched between the 21 and 50 day averages. The 50 day provided resistance.

Astrocast:

Up into the end of the month.

Breadth:

NYA breadth was negative as the NYA stalled at 581 resistance. McOsc issue and volume are still positive. The OEX found support on the upward sloping trendline. Snapshot shows the TICK spending most of the afternoon in distributive mode again. This is identified by a positive index and negative TICK. TRIN also was rising into end of quarter profit taking. CODI is working on a sell pivot, although it has not crossed back above the Alert line.

Volatility:

Zone Timer is making a sell pivot. MVIs also are on an anticipatory sell pivot. This might just be a minor sell back to the center band until the end of month beginning of month seasonality kicks in on Friday, Monday, Tuesday.

Mmentum Cycles Cones:

Cone 1 shows the OEX could not remain above the upper regression channel resistance line. Cone 2 has the same keyline for Friday as Thursday and a slightly increased implied volatility. Thursdays's resistance will most likely be tested again on Friday.

Pivots:

OEX closed below the Keyline and on the hourly trendline after stalling out at R1. This leaves the OEX in a slightly negative posture.

Fibonacci Zones:

Weekly fib resistance stopped them all cold. Ratio oscillators are overbought and rolling over.

RSI, SMI:

SPX RSI dropped away from its upper band. It is too early to say this move is all over as seasonality is just kicking in. XAU, TYX RSI are still looking neutral. XAU and TYX SMI are oversold, SPX SMI is back into overbought.

Stocks of Interest:

ASTN buyers at 2 to 2 1/2 watched today's close at 3 7/32 with pleasure,since it occurred in less than one week.Short term traders in this issue who bought some near 2 could take some profits-long term investors should hold for its long term potential.

CMR saw settlement day as a liquidation of weak holders into strong longer term investor hands on good volume.Who's left to sell as of Thursday's close?Late afternoon Thursday shows 1800 asked at 1.05,5000 at 1.09, 1400 at 1.15, then a large gap.This issue has held 3 tests of 1.00 over the past 2 years.A gap up to 1.64 is not out of the question- that's a good % increase.1.64 was where good selling came in before the recent retest.

The MASKWA will probably not be CMR.TO's first productive mine.The cobalt at Werner Lake is still scheduled to go into production in mid-98- and we're close to mid -98.This was discuused in the official cobalt trade publication.

An announcement about the cobalt production is therefore, logically, to be looked for soon.

OEX Trades:

No new positions have been recommended by either the discretionary or the mechanical models. OEWGD and OEWGF will need higher index prices to hold these levels as time begins to erode any time value left in them. Selling them into a price momentum peak during this period is adviseable.