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Strategies & Market Trends : Waiting for the big Kahuna
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To: Vitas who wrote (18269)5/14/1998 6:21:00 AM
From: Vitas  Read Replies (1) of 94695
 
McClellan summation slammation pattern update:

Well, the Lindsay indicator gave a sell on yesterday's new Dow
high on negative breadth. And we are in the time zone for the slammation to begin. However, it starts getting tricky here.

In previous slammation patterns the decline was not "set up"
until advance-decline oscillators (I use a 17 day simple), came back to up to or near zero. It is at -189 currently. I would think that would have to be worked off at least somewhat.

In the September 1987 slammation, it took 19 days until that occurred. We are currently on day 12 as of Wednesday.
The 17 day oscillator getting to near zero is more important than
the day count of 14 or 15 days that occurred in September 1992
and March 1994 from the warning shot low in the McClellan oscillator.

We also have option expiration week madness which could prop
the market up artificially.

There also is the nagging problem which Bobby pointed out
of the 200 day summation cycle which is counted from the FIRST
peak and tends to lead to rallies. We are in that time window.

This summation pattern is unusual in that the third peak
occurred in a very short period of time from the first peak. As far as I can see, this has only occurred once, in the fall of 1963.

Finally, the third peak started at a very high reading of 3000,
which is unprecedented.

Bottom line: The Lindsay says to be careful; the 17 day a-d
oscillator says to wait for the setup before initiating aggressive
short and put positions.

Vitas
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