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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA
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To: High Country Trader who wrote (9939)1/30/2002 1:33:14 AM
From: J.T.  Read Replies (1) of 19219
 
As best as I recall, no market has ever reversed powerfully (quickly) to the upside in the face of such negative readings (too few bears) per Investors Intelligence - another sentiment indicator that has been right-on the past year. Instead, it takes a process of at least several weeks (usually longer) of increasing bearishness among newsletter writers to get the necessary base for a liftoff.

Well said. As you know, on 9/6/01 II was only 31% Bearish. The first two readings after 9/11 it spike to 37%. However, they stayed Bearish at the peak 42% on 10/04 reading after we were s,artly off the bottom. Moreover, Investors Intellignece readings stayed Bearish above 30% until the week of 11/23/01.

I suspect this next reading after factoring in todays market activity will get that reading back up near 30% Bears from current 23.7% Bears. But this would only be one week. It has definitely caught my attention and altered near term prognosis.

I might also add speaking of the September 21 bottom... and why I do not think we will take out these lows:

1)we had 5 of 6 trading days where the CBOE Equity Index P/C Ratio closed above 1 culminating in the final meltdown on the 20th and 21st with closing readings of 1.27 and 1.23 readings respectively.

2)Go back on mita archives in september and you will find me talking about many indices below quadruple oversold levels on a 5 day relative strenght index and very historic in comparison to other 'crashes or meltdowns'.

Nevertheless, your trimtab link with liquidity worries and also massive debt worries are very real.

However, while I do believe there is more near downside risk, I believe September lows will hold... Time will tell.

Best Regards, J.T.
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