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Non-Tech : Dorsey Wright & Associates. Point and Figure
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To: Augustus Gloop who wrote (3323)12/16/1999 10:43:00 PM
From: Ms. X  Read Replies (1) of 9427
 
Yet another indicator turns south - not the NYSE BP but the OTC High Low index. It isn't one of the major indicators actually but worth noting.

This is calculated the same way as the NYSE High-Low. We take the number of OTC stocks hitting new highs and then divide that number by the number of new highs plus new lows. Once we have this figure, we keep a ten day moving average and that is what we plot each day.

High-Low Index reversed from above to below 70% and is currently at 65.5%. This is a short term sell signal for the OTC stocks and as you know this is the area which has been leading this market.

As with all PnF indicators they do not necessarily translate to a decline in the "markets" however, since this measures a lot of the tech stocks out there and in combination with the OPTI reversing down, we must be extra careful with Nasdaq stocks.

I think in light of all this silliness in the indicators it would be wise to monitor your tech stocks carefully, be extremely critical of those you buy, don't margin the tech stocks and kick back and drink some eggnog. If your techs are starting to break down cover them or sell the trade. Watch the trend chart to determine the action. We'll have to see if the Nas responds with a decline but it does mean that most of the stocks ain't joinin' the party!

Only buy the ones with lampshades on their heads. If you don't see any do some belated Christams shopping in the tech stocks later.
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