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Strategies & Market Trends : TIMING INDEX MUTUAL FUNDS -- Ignore unavailable to you. Want to Upgrade?

To: pater tenebrarum who wrote (109)	2/10/2000 12:37:00 PM
From: donald sew	Read Replies (1) \| Respond to of 428

Heinz, >>>> the divergences within the market are indeed HUGE. over these past few weeks we have seen historic firsts in several measures i watch. <<<< A strong belief of mine is that divergences almost always correct first before further upward moves continues. This is actually the main basis of my GUITAR. YES, I realise that some and possibly many will say that the divergence has been continuing a long time, and they use that type of logic to substantiate continuation. What they fail to realise is a simple issue that the divergence just hasnt peaked yet. Im not calling a BIG KAHUANA, just having a discussion on divergences. Basicly, divergences are anomolies and anomolies are normally first corrected before further movement upwards. Is it possible that we are could be in a new phase where divergences continue. Of course there is a chance but on a statistical basis the probability of that occuring is extremely slim. I do want to explain, that the correction to anomolies may result in changes, but the correction first occurs. For example, and only for discussion, that the NAZ corrects back to say 3300 only, but its rally started at 2500 range. It did not retrace all the way but it corrected enough for the market as a whole to continue up. The divergence between the DOW and the NAZ still exist but not as severe, so it was corrected and the market can now continue up. That was only an example and 3300 was a number that I just picked for this discussion. So in conclusion, my position is that divergences/anomolies, if extreme will most likely lead to some sort of a correcting phase. seeya