MARKET INDEX TECHNICAL ANALYSIS - MITA Message Board

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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA

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To: Kapusta Kid who wrote (6029)	1/11/2001 2:32:46 PM
From: David Lee Smith	Read Replies (1) of 19219

The MomentuMonkey model's definition of value is the computed value. If the computed target is lower than the current market value by more than 5% then the market is "Overvalued". If the computed target is less than 5% of the current market price, the value is "Undervalued". In between is Neutral. Currently at 1:15 CST, the S&P Index stands at 1325. The target MomentuMonkey price computes to 1271, down 4.1%. Since this level is less than 5%, we get a Neutral valuation rating. The SELL signal triggered when the target price drops below 4%. The Neutral Momentum signal show you that we are trending in a trading range as opposed to a definite direction. I am currently 100% in Ultrabear Pro Funds (2x S&P 500) because: 1. The model shows that both earnings PE's and PEG's have come down since last month... 2. I've already factored in the Fed interest rate cut.. 3. I've factored in another 1/2 pt cut at month end.. 4. Money is leaving the country as shown in the US dollar section of the model. 5. Market risk in the bottom of the model shows downside risks to be great at this time taking into account all factors. Only strong earnings surprises can upset the market as far as I see. If analyst projections are on target or lite, the market has a long way to fall,,fast. Also, the valuation can change with market direction. The MomentuMonkey's valuation indicator is influenced by the speed the market is moving. A fast downward trend in the market will bias the valuation and momentum indicators to more negative. When using the MomentuMonkey signals, bear in mind that they are ment to project the level in the next two to three days...enough time to take a position in the mutual funds. Also, if I do not update the model, its usually because nothing has materially changed. I used to post it daily, but now I do it when it has a material change (BUY to NEUTRAL of SELL). I've found that my best profits usually occur when J.T.'s indicators are bearish and I have a SELL signal as we have now. Best from the Monkey!

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