Kas1; I will try to improve on the way I explained it over the
week end, I just started this thing early DEC, when I got in
off the boat, and was surprised to find how miss leading just looking at the DOW can be.
IT's often like looking at surface water and seeing it moveing in one
direction , while just under the surface it's really moving
just the opposite. Trying to land a tow, something like that can
jack you around. :-)
Any way I got all the stocks and made my list according to the
market cap of each stock, GE at the top..UK at the bottom, and
allocated by putting more weight on the MEGA caps than the
smaller ones ( thats was for the market cap index of the DOW )
I did a second one using price, by just takeing the tolal
DOW that day and allocating by dividing the price of the stock
into the DOW INDEX..this gave me more shares of the lower
priced ones, and left out the market cap feature..I compare
the two from day to day with the DOW INDEX, and look for
divergance from the index, and also look to see why.
So that way I get an overall feel of the market..if the divergance
is a lot, and confirmed both ways then I tend to belive the DOW INDEX
will soon adjust and play catchup.
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The puplic and even a lot of Fund Managers are trained to just
look at the surface, and that is the cause of even more
swings. They jump on behind the curve..forcing it into an over
sold, or over bought situation. So far I just use this as
a relitively short term way of timing the future market curve.
It's getting at this time loaded to move up.
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But keep in mind this way I'm looking at it is new, and not
yet well tested, I'm hoping to get others to test it as well,
I'v only made a few small bets so far based on it.
The Market MOOD may take things down or up more than I have
learnd to anticipate, I don't think it can be used to call
the actul top or bottom, but just as a signal that a reverse
is on the way. And then only at times there is a rather large
divergance..sometimes it's useless.
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Last Friday I said this week would be up , or end up.
but the signals were not all that strong. SO far it appears
the market has not started up..and the up signal is getting
stronger, we will see. Right now the Tail is wagging the DOG,
and the crowd is waitng on the INDEX to turn up, the longer
they wait the sharper it will rise when it does.
I'm thinking I need to do the S&P 100..but that will be an
even bigger chore.
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I will add the crowd has also been taught to look at advancing
issues. vs decliners in a broad sence as to the market.
THis can also be missleading, as you can have more decliners
like yesterday, but on lower volume..and yesterday it was
lower volume on the down side, the ones that were up were
up stronger..yet the total number of decliners added up
did exceed ( "price" wise ) the total number of advancers
but not by much, and not in real dollars, as the volume
on the advancers was more. This sort of movement sets up
a surprise.
Jim |
