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

To: el paradisio who wrote (49430)	5/5/2000 7:14:00 AM
From: OldAIMGuy	Read Replies (2) \| Respond to of 99985

Hi EP, Man, This is a busy thread! Looks like I'll have to give up everything else just to read what's here! :-) My IW isn't an "all or nothing" type indicator but is used in conjunction with a general asset allocation model. It's historical average is 60% invested, 40% cash. So, in March when it peaked at just the reverse ratio (40%I/60%C), I was a bit alarmed. Like all good pendulums, the further it swings one way, the bigger the arc will be on the return. My IW Oscillator is the raw data unsmoothed with moving averages. I use it to get a direction and rate of change indication on the IW. Most of the moving averages in the IW are about a quarter of a year for smoothing. Right now the Oscillator is minus 10 indicating a very rapid drop in risk. What it mean is that if all remained exactly as it is for a full quarter, the IW would be at 72% invested, 38% cash. Not necessarily time for a second mortgage on the house to buy the market, but a much less risky marketplace. I guess we'll see what happens next. Mr. Greenspan's comments yesterday were a bit unusual. I've often thought about the $100K FDIC limit for banks. That was an incredible sum back when it was established. However, inflation during the last part of last century eroded that to being less than the value of an average home in the US. Maybe it's time to raise the ins. value to match the devalued currency. Best regards, Tom