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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Les H who wrote (34779)	12/6/1999 6:21:00 AM
From: LaVerne E. Olney	Read Replies (1) \| Respond to of 99985

Friday afternoon CNBC had an interview with Richard Arms. He added his voice to those who have pointed out the "exuberance" of the Nasdaq market, showing graphs of an historic ARMS Index (TRIN). He also described a new method of looking at this factor: The 100-day % Rate of Change of the DOW is subtracted from the 100-day % ROC of the NASDAQ. CNBC showed the resulting chart all of 2 seconds going back to 1982 -- current levels are at historic highs (unsustainable). I've posted a similiar chart from 1993 users.intermediatn.net (adding a 5-day smoothing average and personal overbought/oversold thresholds). The point: The NAZ often outperforms the DOW (as Tom Costello repeats 100 times daily) but the current degree of this imbalance is unsustainable and has historically been followed by a market correction with the NAZ underperforming the DOW. Dick Arms also mentioned parenthetically the dampening effect on this index of adding tech hi-fliers (MSFT, INTC) to the DOW.