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THE WEEKLY RE-LAY

Beginning 05/13/00 Weekly Re-Lay: Stock indices have the potential to give a moderately bearish 2-3 week sell signal in the coming week. If they trade much below unchanged they will turn the majority of their weekly channels lower and project an accelerated move to the downside. If the DJIA tests 10,443 later in the week, it is likely to close below it and project a decline to 9700 by June 5th-9th.

Bonds could not confirm a low, nor discount the potential for further selling. There is a consistent intermediate cycle bottoming between now and May 26th--as well as a second set of daily cycles on May 23rd--leaving open the chance for a final round of selling with the potential of testing 91-20 to 92-08/USM. This will be reinforced if bonds first rebound to 94-08 and then decline to 92-20/USM.

The dollar could not provide another buy signal and recently gave way to a round of selling while the opposite occurred in the Euro. Each of the three currencies (DXM, ECM and JYM) have given an initial neutral signal against their prevailing daily trends--identifying the middle of next week as a decisive time frame for the daily trend(s).

Gold and silver remain in limbo with a good chance of silver setting one new low leading into May 24th/25th. Soybeans traded sideways but remain in a daily and weekly uptrend.

Crude oil again surged, but did it without triggering a third buy signal. It has since fulfilled the intermediate analysis for new contract highs (triggered by the 5/05 weekly closes back above the weekly trend confirmation points) and could provide an intermediate reversal lower in the coming week.

STOCK INDICES: 05/13/00 Intermediate (2-4 Week) Outlook--All indices remain in intra-month downtrends--a pattern that indicates a minimum decline into mid-month and a potential decline into late-month. Since a close above the 5/01 low has not been seen in any of these indices--and since a low has not yet formed within a couple days of mid-month--the intra-month trend has to be interpreted as projecting lower prices into month-end. This will remain intact until and unless a daily close above the 5/01 lows (10724.2/ DJIA, 1458.00/SPM and 3803.1/NDM) takes place.

--	Jun S&P (SPM)	DJIA	Jun ND100 (NDM)
Monthly Resistance	1560.50-1574.00	11,345-11,425	4457.0-4464.0
Monthly Support	1359.50-1367.00	10,122-10,128	3107.0-3156.0
Weekly Trend	Up	Dn/Neut (2)	Up/Neut (2)
Weekly Resistance	1459.20-1463.50	10,805-10,845	3660.0-3690.0
Weekly Support	1402.20-1403.70	10,413-10,443	3107.0-3175.0
Daily Trend	Down	Up/Neut (2)	Down

Since this is only one particular pattern, it is important to incorporate other intermediate trend patterns into the overall analysis. The weekly trends are a mixed bag and would allow for new highs in some indices and/or new lows in other indices. In other words, they are not much help at this juncture though they could quickly act as confirming factors (e.g., If the DJIA closes below 10,443, it will project a retest of the 9731 low).

So, what other intermediate indicators can be considered? One is the weekly 2 close reversal sell signal that was triggered in the NASDAQ 100 on May 5th. This projects lower prices into month-end, adding some credibility to the intra-month downtrends.

There are also the weekly 21 and 8 MAC's, 1/3 of which are already heading lower and the other 2/3 (NDM 21 high and low, SPM 8 low and DJIA 8 low) that are destined to turn lower in the coming week unless these markets immediately rally and never look back. This group of trend indicators could have a profound--and very bearish--influence on stock indices in the coming week(s).

Finally, there are weekly cycles that portend an important turning point--ideally a low--between June 5th-9th. If the aforementioned channels turn lower in the coming week, the combination of all these patterns will project lower prices into early June. In addition, there is a good chance for a quick spike higher and ensuing outside-week/2 close reversal sell signal in both the DJIA and SPM. See following comments?

Short-Term (1-5 Day) Outlook--Minor cycles on May 8th-11th did identify a low as expected. However, as also clarified in recent weeks, this is not as likely to be a final, intermediate low for this move. Since these markets could not violate their mid-April lows yet, it indicates that another round of selling is still likely. The daily trends have turned more bearish as the SPM and NDM are both down while the DJIA remains neutral.

There is the potential for an ideal selling opportunity if these markets rally gradually in the coming week?

INTEREST RATES: 05/13/00 Intermediate (2-4 Week) Outlook--Bonds have a recurring 16-18 week cycle that has governed the lows ever since the October 1998 major peak. The only time the market deviated (and the most common time for deviations to occur) was between the last two lows of the decline (10/99 and 1/00). However, there is a strong chance that this cycle is again taking hold and predicting a low between May 8th and May 26th.

--	Jun Bonds (USM)	Mar Euros (EDH)
Monthly Resistance	98-18 to 99-05	92.86-92.92
Monthly Support	94-18//93-17	92.41-92.45
Weekly Trend	Up/Neut (2)	Down
Weekly Resistance	94-12 to 94-23	92.46-92.48
Weekly Support	92-17 to 92-20	92.28-92.31
Daily Trend	Down	Down

Since the preceding rally was an exact 12 weeks (84 days), the current decline could stretch until the 50% retracement (in time? 6 weeks or 42 days) occurs around May 23rd. Since any minor buy signal between now and May 26th has the potential to be the proverbial "first step of a thousand mile journey," traders should be willing/prepared to venture back in on the long side progressively.

One of the most important factors remains the weekly trend. As stated last week (5/06/00):

"Either bonds will continue lower, close below 93-05/USM and reverse their weekly trend to down...or, they will spike a little lower and then reverse higher--never giving a weekly close below 93-05/USM--and eventually head back to the highs."

Since neither of these scenarios has yet taken place, traders should still be watching both possibilities. Regardless of which takes place, there will still be strong potential for a quick rally from this 18-week cycle. If the weekly trend turns down, it could be the customary "sharp reaction against a new trend" that would be short-term bullish, but intermediate-term bearish. If bonds can dodge a bullet and not close below 93-05/USM during either of the next two weeks, the ensuing rally would more likely be the start of a new intermediate advance with 99-28 as the minimum upside objective.

Short-Term (1-5 Day) Outlook--Bonds spiked a little lower as expected, but did not close the week higher, leaving open the potential for additional short-term selling. This was confirmed by the late-week action following the 5/10/00 analysis for a high within the ensuing 1-3 days followed by a decline into May 23rd.

92-17 to 22/USM is a synergistic support range in the coming week. If it is tested by mid-week and before a rally to 94-08/USM, it could lead to an ensuing weekly 2 close reversal buy signal (and preempt the chance for this decline to stretch into May 23rd) with a 5/19 close above 93-18/USM. However, if bonds FIRST bounce to 94-08/USM or higher early in the week and then drop to 92-20/USM after mid-week, it should only be treated as short-term support, likely to be violated the following week.

CURRENCIES: 05/13/00 Intermediate (2-4 Week) Outlook--The intermediate trend remains up in the dollar and down in the Euro as it has for most of the year. The yen remains neutral needing a weekly close above 94.10 or below 91.91/JYM to break out of congestion and confirm a new intermediate trend.

As stated last week:

"From a little longer-term perspective, I still expect new dollar highs into mid-July, so a 3-5 week pullback and final surge is likely."

--	Jun Dollar (DXM)	Jun Yen (JYM)	Jun Euro (ECM)
Monthly Resistance	112.80-113.14	95.81-96.50	94.94-95.30
Monthly Support	106.62-106.84	89.78-90.48	87.50-88.10
Weekly Trend	Up	Up/Neut (2)	Down
Weekly Resistance	110.79-111.20	93.82-94.10	93.47//94.83
Weekly Support	108.61//106.62	91.49-91.82	90.10-90.67
Daily Trend	Up/Neut (1)	Dn/Neut (1)	Dn/Neut (1)

This remains the case and the intra-month trends have turned neutral--in favor of this scenario--but still require some confirmation. This followed the failure of the dollar to give a new buy signal and the failure of the Euro to give a new sell signal (cited on 5/06/00 as the criteria for a new dollar rally/Euro decline into May 12th-16th) to begin the past week.

The Euro is now trading above its 5/01 high, while the dollar and yen are in the midst of their 5/01 ranges. In order to validate this intra-month reversal in the Euro, the Dollar Index should soon close below 109.45/DXM while the yen should close above 93.60/JYM. Until then, the intra-month outlook is neutral in the dollar and yen.

Short-Term (1-5 Day) Outlook--The dollar did not give a follow-up buy signal and the Euro did not give an ensuing sell signal, so the potential for a dollar surge/Euro drop into mid-month quickly dissipated.

This does not eliminate the chance for a new dollar advance/Euro decline within the month of May and could even lead to an intra-month V in the dollar and intra-month inverted V in the Euro...as opposed to vice-versa.

One of the corroborating factors is the daily trend. The Dollar Index gave its first daily neutral signal (against a prevailing daily uptrend) on Friday while the Euro and yen both gave their first neutral signals against prevailing daily downtrends.

This sets up Tuesday or Wednesday as potentially decisive days in all three markets. If the Euro and yen close unchanged or higher on Monday--and the dollar closes at unchanged or lower--they will require ensuing closes above the 5/15 high in the Euro and yen and below the 5/15 low in the Dollar Index for confirmed trend reversals.

If this fails to take place, it will project a new dollar rally/Euro and yen decline into month-end. Regardless of Monday's high, the yen has important resistance at 93.54-94.10/JYM that will determine whether an immediate new decline will take hold or be delayed.

INFLATION MARKETS: 05/13/00 Gold/Silver--Intermediate (2-4 Week) Outlook--Intermediate downtrends continue to project selling into late May in silver (5/24 is most probable date for a low and 482.0 is target) and potentially into mid-June in gold (263.5-264.5 = support).

--	Jun Gold (GCM)	Jly Silver (SIN)	Jly Crude (CLN)	Jly Soybeans
Monthly Resistance	283.3-287.5	517.5-521.0	27.14-27.75	555.25-561.5
Monthly Support	263.5-266.1	482.0-485.5	23.25-23.65	523.25//504.0
Weekly Trend	Dn/Neut (2)	Down	Up	Up
Weekly Resistance	278.9-280.1	511.0-513.5	30.80-31.10	573.5-573.25
Weekly Support	273.6-274.9	500.0//489.0	28.15-28.40	554.0-556.25
Daily Trend	Down	Up	Up	Up

Short-Term (1-5 Day) Outlook--Gold still needs a close below 276.1/GCM to confirm its daily downtrend, while silver still needs a close above 510.0/SIN to confirm its daily uptrend. Considering that the 5/04 high in silver was a test of the monthly raw SPR and the 5/12 high was a test of the daily LHR, there is a good chance that silver will decline in the coming week...but it needs to see a daily close below 500.0/SIN to confirm this.

July Soybeans--Barring a daily close below 554.0, July soybeans remain in a daily uptrend and should rally back to the highs. However, if they can test and hold 571.5/SN on Monday, a minor peak should take hold by mid-week. No new trades.

June Crude--The intermediate outlook in crude remains the same and has seen initial fulfillment in the July and August contracts, but not yet the June contract. To repeat from the May INSIIDE Track:

"...the benefit of the doubt has to be given to the upside...crude oil gave the anticipated decline and bottomed precisely at intermediate support--and the downside objective--of 23.57-23.71/CLK...It will take weekly closes below 23.85/CLM and 24.05/CLN to turn these respective weekly trends down. Until this takes place--and particularly if crude is able to give weekly closes back above 27.15/CLM and 26.30/CLN--there remains a decent chance for a rally back to the contract highs of 31.18/CLM and 29.35/CLN."

On May 5th, June crude closed above 27.15 and July crude closed above 26.30 targeting new contract highs as the next objective. The July contract just set new contract highs at 29.75. Considering that crude remains in a wide consolidation pattern, this could usher in an intermediate top in the coming week.

This does not mean that short-selling should take place. A peak like this should only trigger profit-taking on longs, awaiting a valid sell signal before the short side of the market should be considered. From a short-term perspective, crude could not pull back enough to generate a 3rd buy signal and has since rallied into an interesting group of cycles. The distance between the previous two highs (11/22/99 and 3/08/00) multiplied by .618 projects a peak on 5/13/00. The distance between the two preceding lows (4/10 and 4/26) projects an ensuing peak on May 12th.

May 13th also represents a 100% retracement in time (33 days down/33 days up) while May 15th/16th is the middle of the month--when minor/intermediate reversals often take hold. I need to see the next couple days before committing to the next couple weeks.

...End 5/13/00 Weekly Re-Lay

Beginning 5/16/00 Weekly Re-Lay Alert...

"Fed Sigh...Or Fed Slide? (aka., What Now?)"

The FOMC raised interest rates by...point in line with most traders...expectations. So, what now? Obviously, the stock indices have rallied a little stronger than what was ideal for this week. As stated in the 5/13/00 Weekly Re-Lay, the ideal selling opportunity would materialize...if these markets rally gradually. Unfortunately, the combination of very light volume and an impending Fed announcement have amplified this rebound and pushed it beyond the levels at which stops were triggered.

In doing so, the S&P and DJIA are attacking their weekly LHR levels (1474.50/SPM and 10,994/DJIA), which could add to the chances for a decline after mid-week...as long as a reversal lower is seen tomorrow. These markets have also set themselves up for a potential weekly 2 close reversal lower if they can close on 5/19 below 10,577/DJIA, 1430.70/SPM and 3417/NDM. As of today, the weekly channels are predominately lower and the only one awaiting confirmation is the DJIA 8 low MAC--that needs a break below 10,587 to turn it lower. For now, however, all of this is merely "potential."

What could erase this potential or begin to place a more bullish spin on these indices? Since tomorrow is a "D-Day" for all of them, the answer to this question is easy. A daily close above 1495.00/ SPM, 11,102/DJIA and/or above 3685/NDM will reverse each respective daily trend to up. In addition, an intra-day rally above 1499.00/SPM and/or 3728/NDM will turn the respective weekly 21 high MAC's up. For now, patience is imperative.

June 5th-7th is shaping up as a critical minor and intermediate cycle. There is about a 60% chance that these markets will decline into then and set an intermediate low. Obviously, this means that there is a 40% chance that a rally into June 5th-7th will be seen. If a decline is imminent, we should not close above the aforementioned daily trend levels. If I am wrong and we do close above these levels, the markets will probably give a quick pullback and then begin another surge into early June. One thing for intermediate traders to keep in mind: If these markets rally into June 5th-7th, it will likely only be a retest of the highs and set the stage for another sharp decline. So, intermediate buying (at least anything over 2-3 weeks in scope) would not be recommended even if we are going to see a rally into early June. Tomorrow's and Friday's closes should clear this up. Until then, it is best to maintain a conservative approach and step aside.

Bonds surged a little higher than expected (also triggering stops on new shorts) but are still capable of declining into next week. Ideally, they should not close above 95-03/USM if a final decline is in store. Since bonds have only given one neutral signal to their daily downtrend, Thursday could be decisive.

The dollar is rebounding but has just tested its daily LHR and weekly 2nd close resistance (111.20-111.30/DXM), opening up the potential for a spike high and reversal lower tomorrow. The Euro has similar support at 90.10/ECM while the yen has tested support at 91.82-91.91/JYM and is trading there now.

Gold is going nowhere fast while silver just spiked to a new rebound high. However, it needs to close above 527.5/SIN to confirm a low. The chance for a low on May 24th remains intact. However, unless silver can get back below 506.0/SIN by the end of the week, this low is more likely to be a higher low.

Crude oil has edged higher while soybeans closed below 554.0/SN and reversed their daily trend to down and today closed below the 5/01 low. A test of 525.5/SN is possible by Friday.

...End 5/16/00 Weekly Re-Lay Alert

May 16, 2000

Eric S. Hadik, Editor

INSIIDE Track Trading

P.O. Box 2252, Naperville, Illinois

630-585-9218

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