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Strategies & Market Trends : MDA - Market Direction Analysis

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To: lightwave51 who wrote (83457)	10/8/2002 11:14:17 PM
From: Tom Pulley	Read Replies (1) of 99985

Name one Long term stochastics's and MACD on the advance decline cumulative indicate a long term bottom is being formed: stockcharts.com[e,a]daulyyay[d19900409,20021231][pb7!b3][vc60][iul14!up14,5!ub7!uo44!ua12,26,9!ua9,20,7!lo132][J6496941,Y]&pref=G Sorry I took so long to respond. My laptop was stolen and I've been out of town so haven't been reading SI. The guy broke a window and stole it out of my truck in broad daylight! Is just one indicator enough or you want more? How about an economic indicator......look at new claims for unemployment which is a good indicator of a bottom when the monthly average is substantially above the moving average of recent years. If I recall correctly we are over 400,000 versus averages pre-recession of 200,000. (The exact numbers are now in the hands of the **' guy who stole my laptop). Another good indicator is the yield of junk bonds versus long term AAA corporate bonds during a period when AAA yields have dropped sharply (now). The spread is currently at near record levels showing extreme pessimism among investors. How about 3 month moving average money supply growth rate. How about mutual fund redemptions by individual investors recently hitting their highest rate since October 1987. How about price/earnings ratios when adjusted for inflation and interest rates. I have my own way of looking at this data, but a popular version is the Fed valuation model which I believe I recently read shows the market to be nearly 40% undervalued. I've never been able to time the market in such a way to hit the exact highs and lows, but by coming within 5-10% on a fairly consistent basis one can make returns significantly above the indexes. imho (and getting humbler every day)(g) we are very near the lows. Tom

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