Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Stocks Crossing The 13 Week Moving Average <$10.01 -- Ignore unavailable to you. Want to Upgrade?

To: Sergio H who wrote (4794)	7/31/1999 5:37:00 PM
From: James Strauss	Read Replies (3) \| Respond to of 13094

Thanks Sergio... This part of the article says a lot: ************************************ In the July 31, 1987 special report Mr. Mamis continues: ?Tops are not made in a day. Unlike bottoms, which often can abruptly materialize on a climactic panic, with many stocks making their lows at the same time (although still requiring ample subsequent base-building), tops form over a much longer period of time. Also unlike bottoms, which form in anticipation of discernable, albeit unbelieved, change, tops seem to come out of nowhere, indeed, out of glowing good-news climate. Nevertheless, there are several repeatedly appearing essential ingredients to tops, the chief of which is, of course, how to fool the most number of people into confidently holding (and even buying) stocks as the bull market ends. The way this is done?is often by magic: Tops don?t look like tops.? ?The notion that there will be some perfect top formation ? Dow up, nothing else confirming ? so that the sell bell will ring for thee alone, is nostalgia for the past. This blurring of a precise signal has been compounded by a change in the definition of ?market timing.? Because of the seemingly easy one-decision profit potential of options and futures, such timing has come to mean ?at the precise moment??Old-fashioned timing is now better described as ?anticipatory patience?? While it may be important for someone who wants to spend the grocery money on one perfect purchase of put options, others (particularly those involved with portfolios of individual stocks) must realize that tops form along the way lacking precise ?timing?. That is, there is no one top, and it may well be that ?the market? (in particular, the DJIA) is the last ?stock? to top out. It is precisely because of that lack of precision that important tops consistently reveal three groundwork ?anticipatory? ingredients. Breadth begins to deteriorate ahead of the peak in the Dow Industrials?The Utility average starts down ahead, sometimes months ahead, of the other averages?Third, volume reaches its peak somewhere along the bull?s path, and, by the end, has diminished noticeably? If you look at every top we?ve lived through, they each have certain ingredients ? internal market deterioration; rationalization and lulling; using up buying power even though you used to know better; and waiting and waiting for the bell to go off, which proves in hindsight to be rather more of a little tinkle that you thought you heard but weren?t sure enough to act upon. The one eternal aspect of every market top is that it occurs before we?re ready for it.? *********************************** If we see a proliferation of articles like this we'll be near a bottom... If we see continued complacency we'll have more downside... It looks like Greenspan & Co. are ready to take back the last two 1/4 points they gave the market last fall... If so, we should test the Dow 10,000 area... Jim