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Strategies & Market Trends : Point and Figure Charting

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To: Mr. BSL who wrote (2875)	5/8/1998 11:20:00 PM
From: Ms. X	of 34810

PERSPECTIVE: HOW LONG WILL IT LAST? Part-1 One of the questions we often get is "When will the NYSE Bullish Percent reverse down?" Unfortunately we do not have a crystal ball and while we would like to know exactly when the NYSE Bullish Percent will reverse down, we can still glean a lot by the chart. The first thing we learn by looking at the chart is that it is at 74% and in the "Red Zone." The "Red Zone" signifies high risk to us. It does not mean the Dow Jones can't go further but it means that we need to be more cautious in our portfolio approaches. Looking at the chart we also see that 74% is extended compared to previous tops in the market. For instance, in October 1997 the NYSE BP got to 76%, in February 1994 it only got to 66%, in October 1989 it got to 74%, and in 1987 the highest was 76%. This data also gives you reason to be more cautious in your portfolio approach. As to when the NYSE Bullish Percent will reverse down, we don't know the answer to the that question. We can however look at past times the NYSE Bullish Percent has been above 70% to give us an idea of how long it lingers above the 70% before a reversal down ensues. Since 1955 there have been 28 times the NYSE Bullish Percent has hit 70% including this most recent time. The average time the NYSE BP remained in a column of X's after initially hitting 70% before reversing down to column of O's was 3.46 months. After hitting 70% the NYSE BP remained above the 70% mark for an average of 4.6 months. The NYSE Bullish Percent use to go to the 80% and the 10% levels routinely in the 50's and the 60's so we also looked at the trend since 1980. Amazingly enough, the same averages held true. After hitting 70% the NYSE BP stayed in a column of X's for an average of 3.4 months and it remained above the 70% level for an average of 4.6 months. The longest span for the NYSE Bullish Percent to hit 70% was between March 1991 and June 1997. The only other two times that came close to this were the February 1972 to February 1975 time span and the October '82 to January '86 area. Part-2 Message 4389833

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