I don't know when Arms invented the indicator, probably that was 30 years ago or so. I have not seen an historical chart of this index that goes back earlier than the late 60's, but I have seen discussion of the fact that this indicator made a double signal in 1962, 1974, 1987, and now 2001. In all of the previous cases, it correctly signalled an excellent buying opportunity. Not to say that it can't fail this time (I am not buying or selling, just hanging by my fingernails..:) )
Other indicators that also look good at this time:
yield curve
money supply
Advance/decline line for nyse
new lows/new highs
stocks trading over 200 day moving average
put/call
Smart money index
Last year, I think all of these were in a negative posture, for the most part.
According to some, valuatations are 'fair', although many of the big techs still seem very high to me.
As you say, though, debt is very high, and the COT is disturbing. But the market internals say we have a good chance to rally soon.
Robin |
