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[TTHQ Staff]

We have  a  very interesting  set-up in the  markets, that 3 out of every4 times, has resulted in a great trading opportunity. Below  are my comments for thepast three days to our clients, which explain the set-up I’m talking about.

(3-28-05) The BSE is negative, but also it is are near the bottom of its range, and that is the area from where sharp rallies take place, even when the overall trend is down, and the rally is nothing but a bounce from an oversold condition. (3-29-05) The positive divergence between price and the BSE has occurred while the overall trend, and momentum are negative. Consequently, it may cause an upside reversal on Wednesday, which in all likelihood, will be negated by a downside reversal on Thursday. If that happens, expect at least 2-3 real ugly days to follow. (3-30-05) Today we got the upside reversal, the key day though, is tomorrow.	(3-28-05) The BSE is negative, but also it is are near the bottom of its range, and that is the area from where sharp rallies take place, even when the overall trend is down, and the rally is nothing but a bounce from an oversold condition. (3-29-05) The positive divergence between price and the BSE has occurred while the overall trend, and momentum are negative. Consequently, it may cause an upside reversal on Wednesday, which in all likelihood, will be negated by a downside reversal on Thursday. If that happens, expect at least 2-3 ugly days to follow. (3-30-05) Today we got the upside reversal, the key day though, is tomorrow.
(3-28-05) The T.O.  is at the bottom of its range, and it is attempting to turn up. Over the  next two days we could see either a genuine upside reversal, or, a break-down. (3-29-05) The positive divergence between price and the T.O. has occurred while the overall trend, and momentum are negative. Consequently, it may cause an upside reversal on Wednesday, which in all likelihood, will be negated by a downside reversal on Thursday. If that happens, expect at least 2-3 real ugly days to follow. (3-30-05) Today we got the upside reversal, the key day though, is tomorrow.	(3-28-05) The T.O.  is at the bottom of its range, and it is attempting to turn up. Over the  next two days we could see either a genuine upside reversal, or, a break-down. (3-29-05) The positive divergence between price and the T.O. has occurred while the overall trend, and momentum are negative. Consequently, it may cause an upside reversal on Wednesday, which in all likelihood, will be negated by a downside reversal on Thursday. If that happens, expect at least 2-3 real ugly days to follow. (3-30-05) Today we got the upside reversal, the key day though, is tomorrow.
The  10/20 day TIs  indicate that the trend is DOWN for NASDAQ (we need 2 consecutive days of downside/upside action by both TIs to confirm a change in trend)	The  10/20 day TIs  indicate that the trend is DOWN  for  the SP. (we need 2 consecutive days of downside/upside action by both TIs to confirm a change in trend)
SUMMARY: Yesterday (3-29-05)  we said:  " The indices made it to support, and the big question is; "will it hold?" It may, for at least a day. The fact that despite the positive divergences between price and  T.O./BSE, price continues to come down, it means that the overall momentum is still overwhelmingly negative, and therefore, the odds are better than even that ultimately support will be violated. However, looking at data going back to 1980, three out of every four  times,  the current set up has resulted in a one day upside reversal, followed by another reversal to the downside, and  by an acceleration of the move. Consequently, if support holds tomorrow, we will not know until Thursday, if it was for real." (3-30-05) Today we got the reversal we talked about yesterday, and  tomorrow we'll find out if it was for real. If we get continuation to the upside, the odds that we have a 10-15 day rally ahead of us will be better than even. However, if we get a downside reversal, and a close below today's lows, today's action will be negated, and the probability of at least a three day decline with a magnitude ranging between 3.5% to 5%, will  be 75%. (FOR H.O.T.S.): If  the set-up plays out as it does 75% of the time, it means that we’ll have a  decline ranging between 3.% to 5%  in a period of just 2-3 days.  Some stocks, which appear vulnerable can have outsized moves during a 3.5%-5% market decline. Two  trades that I’m contemplating  in our trading accounts, will also serve nicely for our HOTS subscribers. Specifically speaking, I’ll be looking to buy  puts on HOLX, and OSTK.  As always, we’ll  send  an email in real time to notify you, so, you can take advantage of the opportunity. Ike