Hi Peter, My "Idiot Wave" measure of market risk hit an all time high (since 1982) the week of March 20th. It was driven by two of the four components at that time. SPECULATION was the worst of the four followed by DIVERGENCE. Surprising was that the other two components, RELATIVE VALUATION and ZEAL were both Bullish at the time.
Speculation measures the best and worst performers in Value Line's 1700 stock base. During that week, the Best Performer was up 860% in just 13 weeks while the worst was down 80% and showed a tremendous imbalance. This sort of thing occurs once in a while and can sometimes last for months. This time around, SPECULATION has been BEARISH since mid-November. March 20th was the "climax."
execpc.com
My SPECULATION measure is still showing high risk, but that will take another week to flush out the percentages, as Value Line's data is about two weeks behind on such things.
The other bearish component, DIVERGENCE, is from Norman Fosback's book "Stock Market Logic" (sort of an oxymoron, don't you think?). He has a measure called the "Hi/Low Logic Index" that he applies to the NYSE. I have used his same formula but applied it to the NASDAQ. It looks at how many new highs and lows there are each week relative to the number of separate issues traded that week. During the week mentioned it showed 364 New Highs and 406 New Lows. Both numbers being very high shows confusion or "divergent thinking" by the market participants and is BEARISH. By comparison, last week there were just 89 new highs and 708 new lows. No confusion there, so it is now BULLISH for the short term (next three months).
execpc.com
AIM did do some nice things for me in recent times. Here's what the graphs look like for my history with JBL:
execpc.com
As you can see, I was taking some profits as recently as the week of 03/27 at $44-1/8 bringing my Cash Reserve to about 33% of total. I managed to pick up some additional shares (about 8% more) last Friday in the low $30s and have a "fill in" order placed at $33 as of about half an hour ago. Price is currently just above that point.
As of last Friday with the price at $32.50, I'm still showing a profit of over 100% with a cash reserve for further buying representing about 38% of current value. Thanks for asking, hope this didn't bore everyone to tears!
Best regards, Tom |
