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Strategies & Market Trends : Point and Figure Charting

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To: Mr. BSL who wrote (8728)	10/16/1998 5:37:00 PM
From: Bwe	Read Replies (2) of 34816

Dick, Chartcraft has taken work done by the Cabot Market Letter on new 52 week lows and has included this "Two Second Indicator" in the indicators they look at to judge the markets health. Cabot has found that below 40 daily new lows on the NYSE signals a healthy market. When the market is healthy, Cabot's found that the number of daily new lows will stay under 40. The market gives off a danger signal when the market is hitting peaks and simultaneously, the number of daily new lows is exceeding 40. When the "Two Second Indicator" shows 5 consecutive days of readings over 40, a warning signal is flashed and defensive action should be taken. I don't think this market has seen less than 40 new lows on the NYSE for any number of consecutive days since late April. This is just off the top of my head, though I believe I'm right. The market will signal good health once again, according to this indicator, after a retest of market lows (such as the one we've recently had) and at least 4 days of readings of fewer than 40 new lows while the market is advancing. Like Chartcraft, I've found this indicator to be very reliable. FWIW. Bruce

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