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To: Black-Scholes who wrote (44495)	9/5/1999 7:37:00 PM
From: Don Pueblo	Read Replies (1) \| Respond to of 50808

I don't need a million bucks from those dudes, Clyde. I don't care if you believe me or not, either. Nobody you know will ever see my strategy, and I wouldn't sell it for two million dollars. That's a fact. It's funny. You don't ask for proof, (I would have), you just discount what I say. It is foolish to underestimate an opponent, no matter how many books you think you understand. Fair warning, dude. Just watch my jets if you want to trade against me. You can have all the proof I am wrong there handy with you, whatever big books you need that say I can't possibly do it, I'm a flake, it can't really be happening, and I'll still take your money. You'll be random walking, and I'll be random driving. I guarantee it 100%. See ya.

To: Black-Scholes who wrote (44495)	9/7/1999 1:43:00 AM
From: Don Dorsey	Read Replies (2) \| Respond to of 50808

Well I'm willing to share some results showing the market is non random, if the Nobel committee will get their check ready. Theory: Money is the energy of the markets. Since there is a finite amount of money in the world, conservation of energy must exist, even in the markets. Method of observation: To determine if past market action has any effect on future stock performance, we will identify points of sharp rallies, and sharp declines and test whether there is a meaningful difference in performance over the immediate future, by hypothetically buying in both cases. Measurements: We will define a sharp decline as a 14 day RSI crossing below 30, and a sharp rally as a 14 day RSI crossing above 75. In each instance we will hold the stock for a period of 5 trading days. Expectations: If results are random we would expect percentage winners in both tests to be just slightly above 50%. Results: The following results were obtained using 20 years of data (except for MSFT which used 13 years, and MCD which used 30 years.) RSI<30 RSI>75 stock #wins/#trades win% #wins/#trades win% INDU 20/30 67% 31/48 65% GE 20/29 69% 18/40 45% INTC 19/34 56% 22/47 47% MCD 36/53 68% 27/64 42% MSFT 8/15 53% 18/38 47% MIR 35/52 67% 18/40 45% NIKE 23/47 49% 20/42 48% SFA 27/52 52% 15/36 42% SNE 27/44 61% 14/36 39% TEX 21/32 66% 9/21 43% WFC 18/32 56% 13/29 45% WEN 23/41 56% 15/31 48% TOTALS 277/461 60.1% 220/472 46.6% Conclusion: To be thorough, testing should be extended to include thousands of samples, but this random sampling is strong evidence against the argument of random movement. 1) The oversold sample out performed by 13.5 points, a 29.0 percent improvement. 2) On an individual stock by stock basis, the oversold sample outperformed 12-0. 3) The oversold sample scored above the expectation for random results in 11 of 12 cases. 4) The overbought sample scored below expectation for random results in 11 of 12 cases. I'll expect my check form the Nobel committee sometime this year.