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Strategies & Market Trends : MDA - Market Direction Analysis
SPY 671.910.0%Nov 14 4:00 PM EST
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To: LaVerne E. Olney who wrote (81243)8/6/2001 11:13:23 PM
From: KymarFye  Read Replies (2) of 99985
 
Just as it makes perfect sense that there'd be a volatility drop-off after the unprecedented peaks reached throughout the last couple of years, it makes sense that speculative activity as depicted in the your material would also work its way to an extreme low. Question is whether, after the recent uptick, it'll continue on the way back up, or instead turn back down and reach an even lower low - could be, if, say, CSCO or the reaction to it is just another much-anticipated non-event.

The other thing I like about your indicator is it corresponds with some other work I've read on the role of credit (including margin loans) in the acceleration and extension of any meaningful uptrend. The suggestion is that until businesspeople and speculators/investors alike are almost afraid not to be taking on risk, there's no reason for any stock market to advance very far or for very long. The buyers' strike and the reduction in business capex are two interrelated sides of the same coin: They're almost the same thing - each of us in his or her own little corporation, unwilling to make the telecom or enterprise software or hardware investments that a couple of years ago we were willing to borrow money at higher rates in order to make.
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