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Strategies & Market Trends : MDA - Market Direction Analysis
SPY 680.28-0.5%Dec 1 4:00 PM EST
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To: Zeev Hed who wrote (78822)6/15/2001 6:04:35 PM
From: t2  Read Replies (2) of 99985
 
Zeev, Just a note about the high put/call. That is 3 days in a row. Might be 4, I am not sure.

Ralph Bloch, the technical analyst for Raymond James had called a Naz bottom in early April based upon the high Put/Call over a certain value for several days(forgot the exact number).

P/C is starting to look the same but the VXN and VIX are still somewhat lower.

How does this scenario differ from what the happened at end of April. If we see a few more days of high P/C, would that change your mind?

I don't know how to factor this in but back at the end of March we had selling for tax purposes and the redemptions were largest in technology funds. Don't know if this weakness will lead to redemptions in tech mutual funds the way it did back then, especially if the diversification lesson was learned.

One other point is that at the April bottom, Bank of America strategist changed his weighting from 55% stock to 70% and when the Nasdaq hit about 2200, he put it back to 55%. Great timing!

Now the economy looks to be in worse shape but the prospects for the interest rates declining are much better. Will that cause asset allocation changes? I suspect that is going to happen in major firms.

Those factors keep me from expecting a break below 2000.

What is your take on that logic?
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