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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: nicewatch who wrote (40776)	6/20/1999 8:10:00 AM
From: William H Huebl	Read Replies (1) \| Respond to of 94695

Frank, as a consolation prize, I will repost the 55 day "rule" which may be operating now even as we communicate... To: ratan lal (18603 ) From: Vitas Saturday, May 16 1998 10:28PM ET Reply # of 25965 Ratan: from what I can see, the 55 day trading "thing" is not a rule, per se, it is an observation. I'm reading from a market letter that says "In 1987 the market topped on August 25, declined to Sept 8, then rallied to Oct 2nd, the 39th day from the top, then began the slide into the crash on day 55 . In 1929 the market topped on Sept 3,, declined to Oct 2, then rallied into the 11th, the 38th day from the top, then began the slide into the crash on day 55." What I think, as Bill would say, IMHO, is that markets do not just fold over in a heartbeat, there is a detectable deterioration that occurs over a period of time. As Bobby said earlier, it takes some time for it to occur. I believe that the 55 day rule is based on calendar days; you can count them out for us and then you will be known as Count Ratan (not a bad thing). I think that the count is based on an index, whatever it is. Futures don't count, IMHO, etc., because on a new high two weeks down the road, the time premium is lost and therefore, if the index makes a new high, the futures might not. As I recall, you are supposed to start the count again if the index makes a new high, but I know in at least one case, an interim new high did not matter. But then again, it was not a "crash" situation, And then there is the right time to look for the 55 day thing. IMHO, again, I think you need serious deterioration in a number of indicators to even begin looking for it. But, I think it represents something, which is that markets do not just fold over on a dime; it takes time until the specialists position themselves, etc. Vitas Bill