Bill, According to Tom Dorsey the 10Week, HiLo and Options Bull Percentage are Short Term Leading indicators which many times turn into long term, with the 30 week more a long term but following Leading indicator. According to my understanding Tom Doresey considers the 10Week, HiLO and Options Bull % like a three legged stool. When two of the legs reverses one way of the other then we should get prepared for the NYSE and or the OTC to move one way or the other. I usually jump in/out of the market at these points depending on my imvestment philosophy keeping in mind the capital tax consequences. When the third leg of the Leading indicator reversing with the other two legs then many times the NYSE and or the OTC reverses in the same direction in the near future.
Yes, I, when bottom fishing, do look at my past charts, to compare when a possible bottom will be reached. Such an example, was in 1998 when the bottom was reached in the market and many sectors including the Semi's. I considered it a buying opportuntity with the Sector being below the 30% (Oversold area). Consequently, I made some great money. Above the 70% area is the overbought area, the place to be but not the place to buy.
However, each person, must find their own investmet (risk) style which will allow them to sleep each night.
Hope this helps. Rememember, that approximate 75-80% of a stock price is based on the market and sector it is in and only 20-25% on the specific stock. Technology, is hot. According to DW the Biogenics and Semi's are the two most volatile stocks sectors of the 41 sectors which they track. Individuals can make great money if they buy right in these sectors.
JUST my opinions.
Paul |
