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Strategies & Market Trends : Waiting for the big Kahuna
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To: HairBall who wrote (21863)7/19/1998 10:52:00 PM
From: William H Huebl  Read Replies (1) of 94695
 
LG,

Thanks for the provocative post. As I get it, you are asking four questions in one...

- how do you tell when a stock will continue to go up?
- how do you tell when a stock is at a peak?
- how do you tell when a stock will continue to go down?
- how do you tell when a stock is at a bottom?

Now except for intricate, estoteric and sophisticated short term timing indicators, I believe simpler is better, WHEN IT WORKS!

For me, I use 3 MAs to answer those questions...

- Stocks keep moving up when they are over their 144 day time series MAs. Short term, it seems true if they are over their 17 day weighted MA.
- I believe a stock has peaked when the 200 day simple MA turns down.
- Stocks keep moving down when they are under their 144 day time series MAs. Short term, it seems true if they are under their 17 day weighted MA.
- I believe a stock has bottomed when the 200 day simple MA turns up.

Those seem to be fairly reliable indications of all the things you ask. Everything else is eyes of newt, a couple of bat wings and a frog leg or two (tastes like chicken).

As far as MR MARKET... I use VGY almost exclusively to say whether the general markets are moving up or down. The VGY seems to lead the DOW and other indices.

Based on the above:

- VGY is diverging greatly from DOW to the downside.
- VGY is still going up but below 144 TSMA and 200 SMA seems to be in a process of peaking.
- DOW is at 144 TSMA and well above 200 SMA which continues strongly up.

For the more esoteric stuff, the Williams A/D on the DOW is diverging considerably to the downside with the DOW... this is an indication of internal weakness and is supposed to be a sell signal according to Larry Williams. Unfortunately, I have not been able to find a comparable over the past 15 years on the DOW...

So this tells me THIS TIME IT'S DIFFERENT... and I hope that is not saying that this time it is worse than what we have ever seen!

Thanks again.

Bill
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