Titanic Indicator, -- another BPNYSE? Interesting conjecture. Tulvio
The Titanic Indicator has been activated now for 2 consecutive days. This
indicator activates when the Dow Jones Average makes a new all time high and
within 2-3 trading days following that high, the number of new lows on the
NYSE exceeds the number of new highs. (Today, both of these events occurred
on the same day!) When this indicator activates, it usually portends an
imminent Bear market or at least a severe decline. The
Titanic Indicator also activated on around 5/13/98, prior to the sell-off into
June, and it activited on around 7/23/98, as the 1998 bear market was just
beginning. I learned about this indicator at a seminar that I attended last
summer and the details of the indicator were rather sketchy. For example, I
am not sure whether the DJIA high is supposed to be a print high, intra-day
high, or a closing high. Also, I do not know the exact historical
track record of this indicator in terms of the number or % of false signals
(perhaps someone with access to the NYSE new high/low data can back-test it),
but the seminar leader said it was very reliable. The fact that this
indicator is now being activated should not be surprising given the
characteristics of a late stage Wave 5 rally.
Subject: Re: Titanic Indicator
Date: 3/11/99 4:31 AM !!!First Boot!!!
From: <A HREF="aol://3548:JBuck10447">JBuck10447</A>
Message-id: <19990310233129.29737.00000798@ng22.aol.com>
I had heard of this a long while back. Did a little work using it and found
it interesting -- BUT -- did not follow through since I am a daytrader.
I went and found a description that includes some brief details and some
clarifications.
----------------
Ohama Titanic Syndrome Configuration
The Titanic Syndrome is a term coined by Bill Ohama in 1965 and was first
written about in Stocks & Commodities Magazine in Nov. 1988.
The Titanic Syndrome is deceptively simple and is a very reliable indicator of
important market tops.
Ohama first recognized the Titanic Syndrome retrospectively in the Fall of
1965 - it had correctly identified the very important May 1965 market top.
Since then it has been consistency itself, it called the top before the Oct.
87 crash. The smallest correction following a Titanic Syndrome top was 9.6% in
1994, the largest was after the Jan. 1973 top, a whopping 45%, the average
since May 1965 has been 25.7%. The August 25, 1987 top to the intraday
low Oct. 20, was 40%. So you see one should have imprinted on the inside of
ones skull the criteria of the Titanic Syndrome so that a mere rolling of the
eyes will remind us of such a potent market top indicator.
You are aboard the Titanic when:-
1.The DJIA hits a new high for the year, or 2.rallies 400 points or more, and
3.within seven days, before or after this high, 4.the number of NYSE new 52
week lows exceeds the number of 52 new highs.
That's it.
After the above criteria have been identified the DJIA may test or even
marginally exceed the high. However, the averages, particularly the Dow
Utilities will not make new highs. These negative divergences are another call
to cover.
There is no equivalent at market bottoms, there is no Poseidon Syndrome so to
speak.
-------end------- AND:
Subject: Re: Titanic Indicator
Date: 3/11/99 8:01 PM !!!First Boot!!!
From: <A HREF="aol://3548:JER3CUBE">JER3CUBE</A>
Message-id: <19990311150113.09444.00001061@ng147.aol.com>
The Cabot Letter calls it the
2 second indicator. See the site.Cabot's Two Second Indicator
When we open the financial section of our newspaper every morning, we look at
one number first. This is the most important number we look at all day. The
smaller that number the better we like it. And it takes us only two seconds to
check it. That's why we call this new indicator Cabot's Two-Second Indicator!
This new indicator, unlike any other market timing indicator we know of,
answers the question, "How healthy is the stock market today?" When you use
it, you are simply taking the temperature of the stock market. All you have to
do is glance in your newspaper and note the number of stocks on the NYSE that
hit new 52-week price lows for the previous day. This single number, when
properly interpreted, will give you a very good idea of the health of the
current stock market.
Is this indicator perfect? No. No timing indicator is infallible, and we never
expect to find one that's perfect. Nevertheless, we have found a strong
correlation between the number of daily new lows and the health of the stock
market itself. Essentially we see that as long as the number of daily new lows
does not exceed 40, the market is sound and in no danger of falling
significantly.
In sum, the indicator is most helpful during normal markets and at market
tops. But in addition, at market bottoms this indicator can help you identify
the reduced selling that takes place before the next major market advance.
As a result of our research, we have been able to divide the stock market into
three distinct categories of varying degrees of strength or weakness. Here are
the categories: <A HREF="http://www.cabot.net/index.html">CABOT LETTER SITE
</A>
Jer3Cube
jer33:3/eccl 1:9advance.
As a result of our research, we have been able to divide the stock market into
three distinct categories of varying degrees of strength or weakness. Here are
the categories: <A HREF="http://www.cabot.net/index.html">CABOT LETTER SITE
</A>
Jer3Cube
jer33:3/eccl 1:9 |
