Jamie, >>>True, the summation index have similar numbers, but they come from a totally different stage of a rally. The 1991 event is from an early stage, and the current one in in a very late stage. I think your are comparing apples with oranges<<<
Yes, the large caps indices are much further ahead at this stage of
the summation than they were in 1990. However, the pattern itself, which measures advance declines, is strikingly similar, having both
in 1990 and 1998 come from deep oversold readings of -1500. This kind of oversold reading usually only comes once every 4 years, and therefore, is sort of a landmark. The advance decline line itself is strikingly similar, lagging badly both times.
My instinct is to follow the summation pattern first since it in a sense
measures the structure of the market, as long as it keeps doing what
it did then. Based on this I'm going on the assumption that prices
will follow higher.
However, since the high prices are an aberration at this stage,
I've got one foot out the door at any signs that the summation and
oscillator patterns stop following that 4 year bottom script.
BWDIK,
Vitas |
