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Strategies & Market Trends : Stock Attack II - A Complete Analysis

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To: Ibexx who wrote (29106)	2/4/2002 10:10:43 AM
From: Paul Shread	Read Replies (1) of 52237

My point was that when the December lows are also taken out (in addition to a down January), the correlation is supposed to be higher and more significant, as is supposed to be the case when the December lows hold in a positive January (I believe the December lows indicator is for the entire first quarter of the following year, not just January). The December 2000 lows were taken out on January 2-3, 2001, so the positive January last year was not supported by the December lows indicator. January 2000 was a down month for the Nasdaq, so neither year had both indicators lining up in the same direction. This year, both indicators on all indexes came in on the bearish side, so they are both predicting the same thing. One reason they may be worth paying attention to is that seasonal patterns can invert in bear markets (witness the weak November-December in 2000), and weakness in a seasonally strong period may say something about the underlying conditions of the market. All FWIW; I don't have the data for how reliable the two indicators are when they line up together.

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