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Strategies & Market Trends : A.I.M Users Group Bulletin Board

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To: James F. Hopkins who wrote (13752)	11/29/2000 9:57:31 AM
From: OldAIMGuy	Read Replies (1) of 18928

Hi Jim, I don't know of an easy way to measure the "float" of shares available at any period of time. I take the number of issues traded on the NASDAQ and NYSE together to come up with a total. That total then becomes part of a 13 week smoothed average. I then compare the current week total to that smoothed average to come up with a % change and direction. In both 1983 and again in 1993 there were huge surges in the number of new issues coming to the market. In 1993 the total number of issues on the NASDAQ surged from about 4000 to about 5000! The broad market went flat for 18 months while it absorbed this 25% increase in new names on the Street. We did see the net change head back to break-even back in the spring market surge, but since then we're net losing issues being traded. Consolidations are a natural thing when we have had a lot of new listings in a new area of business. I'd say that the DotComs are probably a great part of this current consolidation we're seeing. The ZEAL indicator is yet another way of measuring speculation in the market. It measures what is happening when P/E's are high and when they are not as attractive. High P/E's generally bring on lots of IPO's; after all, wouldn't we all prefer to be paid 20X Earnings than 10X if we're taking our company public? When the market is skunky, like now, nobody in their right mind would attempt an IPO as they know it's not going to be priced for the maximum initial price/share. I have to admit that seeing the NASDAQ well below 3000 is a bit of a surprise. I had expected it back in May, but after we saw the market start to churn in a range of 3000 to 4200, I didn't think we'd fall this far. Like in the old days of "medicine" a good bleeding seems to always be healthy for the market long term. It's left many an investor feeling a bit anemic this time around, however! :-) I'm all for getting rid of the leaches and putting my portfolio on an Iron Rich diet. Can't wait to see rosy cheeks on my stocks! Best regards, Tom

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