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

To: sam_o who wrote (54531)	6/18/2000 12:54:00 PM
From: Les H	Respond to of 99985

My interpretation of the report is that most stocks have topped out for the short-term two weeks ago on June 2. The percentage of stocks above their respective moving averages have been dropping for two weeks now and the number of stocks making new highs versus those making new highs has been deteriorating over the same time. The values have dropped from recent high levels and would likely turn negative for the 20-day high/low ratio. This indicates that the major indices were being held up by fewer stocks. Unless you were trading these stocks, your odds for profit were declining. I use the 20-day since I have 20-day high/low Donchian channels on my charts to indicate trends and channel breaks. Stocks and groups in trends will generally continue making new 20-day highs or lows. Breadth for Individual Sectors I maintain the same data for stocks grouped into industry sectors. The parenthesized number is the number of stocks in that particular industry sector. One can identify very oversold groups by looking at the percentage of stocks above respective moving averages (such as Automotive). Often, these percentages will top out above 75 % or higher and trough at 25% or lower. For groups like technology, finance/banks, retail, the percentages will often stay high or low for quite a while in a trend. The 20-day high/low shows fewer stocks making new highs in most of these strong groups (Semiconductor, Internet, Telecom, Electronics, and Biotechnology) as well. AIQ market log I generally use the US (Unconfirmed Signals) ratio in AIQ to look for potential turns. When the ratio of buys to sells gets to 20% or below, usually a top is usually imminent. I usually use 30% as a cautionary threshold. When the ratio of buys to sells gets to 80% or higher, it usually is close to a bottom. Two weeks ago, on June 5, the Unconfirmed Signals reached 28% buy signals with the low on Thursday at 26%. Caution would indicate buying on pullbacks with tight stops since then.