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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 681.76

-1.1%

Dec 12 4:00 PM EST

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To: Rock_nj who wrote (83526)	11/30/2002 2:05:54 PM
From: Tom Pulley	of 99985

Which will win out in the month of December? Rock_nj, my guess is that December will be a weak. My timing model went to 25% short based on the closing readings Friday. Perhaps this rally needs to take a rest. A couple of things indicating this are shown below. First, the most recent Nasdaq high prior to this run-up occurred on August 22nd. On that day the percent of stocks over their 10 and 21 day moving averages peaked at 82% and 80%, respectively. At Wednesday's high close of 1488, the numbers were 80% and 79%. Message 18286377 Only 14 stocks made new lows on the Nasdaq Friday: stockcharts.com[e,a]daclyyay[d19980101,20021130][pb50!b200][vc60][iUb14!La12,26,9]&pref=G This low level of new lows indicate an overbought condition. The put/call ratio is dropping into the 0.6 range and equity put/call ended the day Friday at .47. Again, these ranges are low and suggest a correction in the up-trend should occur soon: cboe.com The monthly insider buy/sell ratio increased substantially in November: insider.thomsonfn.com So, quite a few indications we will see a correction in December that hopefully will position the market for gains next year. Certainly there is not much risk of missing a huge rally at this point. The odds point to the likelihood of opportunities to go long below current prices. Tom

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