Vitas:
The 5-day ARMs on the NYSE by itself is not very accurate. Institutional selling is having a greater effect on volume than issues. It has been that way for some time. I use the components of the ARMs in several different ways for market turns. This has been useful for several years. Currently, July 11 to 16 is a good opportunity for a bottom. If it fails, it indicates further trouble.
Around January 2000, I was one of the few individuals left watching the INDU and TRAN. I remember mentioning that they were the economy and they were ready to drop because the Fed began raising federal funds in June, August, and November of 1999--three times. Even after the INDU peaked in January 2000, Mr. Greenspan nailed in three more spikes during 2000. He must have thought he was fighting Dracula. When he recognized his mistake, he began lowering rates frantically. Nine months after he started dropping rates, the INDU and TRAN bottomed on September 21 and 20, 2001, respectively. The bottoms were at INDU 8235 and TRAN 2033. From there, the INDU and TRAN rallied and have not breached their lows of September 2001. If either the TRAN or INDU reaches a new low, then we have more problems.
Many people continue to view the NASDAQ Composite and NDX as the market and market. I don't.
If the bottoms in the INDU and TRAN both hold, then I expect an ugly and narrow bull market in those two indices only moving into next year. After that, just hold on to your loved ones very tight.
I think it was 1986. I remember timing the program trades. After that, I decided not to play anymore.
My main concern now is Mr. Bush's approval ratings. I think they will begin slipping. If they slip substantially, I would be very concerned. Not because I like the fellow but because I already heard one "general malaise" speech delivered by Mr. Carter. |
