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Politics : Formerly About Applied Materials

AMAT 231.12

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To: Big Bucks who wrote (24751)	9/30/1998 11:04:00 PM
From: Gottfried	Read Replies (2) of 70976

Bucks, you say >Lots of short term indicators dropping below the long term averages indicating more downside to come, IMO.< My comment: More downside to come doesn't follow from Lots of short term indicators dropping below the long term averages Please allow me to demonstrate: I prepared a chart of the actual DJIA through 9/3/98 and forced the DJIA to remain flat after that date. The 50-day moving average [ma] is red, the 200-day ma is green. You will see that the red curve continues to trend down for 50 days after the DJIA becomes flat. The green curve trends down for 200 days. Then both ma's stay level. geocities.com The moving averages are trailing indicators and have no influence on the DJIA. Even the guy whose chart you linked says: The NASDAQ surged above 1700 last week, but promptly ran into resistance from its moving averages and the 1740 level. Expect the moving averages to cross this week. Guess he's been doing this so long he's confused about cause and effect. The index he charts influences the ma, not vice versa. Gottfried He could be right in his conclusion, though.

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