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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (28415)	9/24/2000 9:58:54 AM
From: Logain Ablar	Read Replies (4) \| Respond to of 67759

Hi Harry: I subscribe to Don Hayes newsletter and one of the indicators he follows gave a negative signal on Monday. Its called the sign of the bear and the past 6 times the indicator has flashed the market has had a pretty good sell off. The 6 times are from 1929 to present and the timing of the sell off is anywhere from 2 to 26 weeks. We know indicators can fail (Hayes acknowledges this) but he is quite cautious in this market environment. With this indicator only working 6 times (but they were all pretty gWith the FED priming the pump (money growth over 10% again) the rally can last but before we get too bullish from Fridays action we should keep this in mind. Here is a direct quote - But here it is on September 20, 2000. Much like my stock market hero Edson Gould, who was warning of a great bear market, I have been looking at so much anecdotal evidence, showing excessive optimism, excessive debt, and excessive valuations for the last three years, but all the pieces did not fall exactly in place. Each time the market suffered some serious indigestion, not enough to cough up the excesses, but enough to shake up the establishment, the Federal Reserve bailed it out. This personality finally convinced the herd that this new era was not going to allow bull markets to fail. As I outlined in my last three reports, my nervousness really reached a new crescendo last week with all the dislocations of the excesses. This was heightened as a new indicator, similar in some ways to the Arms index cited above that flashed a powerful "perfect" signal in 1982. This index comes from Peter Eliades studies as far as I know. At least he is the one that brought it to my attention. It was written up in Barron's in May 1998, shortly after one of its previous signal. I have a special fondness for indicators that have never been wrong. Obviously, there is always a first time, but if they strongly support other evidence that I have found to be highly accurate, I'm willing to take the chance. And as I said in yesterday's "special report," six perfect calls out of six signals are not odds that I won't to bet against. So I'm probably making a mistake by "playing" the market for another 20+% but I'm keeping stops in place and ready to go to the side lines quickly even though I feel Friday's action was short term bullish. Here are the other dates. July 22, 1929-----7 weeks before crash December 14, 1961------10 weeks before crash January 31, 1966------1 week before crash October 25, 1968-------26 weeks before crash December 12, 1972------4 weeks before crash April 6, 1998-------15 weeks before crash September 18, 2000------?????????? Tim

To: Johnny Canuck who wrote (28415)	9/24/2000 8:23:23 PM
From: Logain Ablar	Respond to of 67759

Hi Harry: I’m not a bear at the moment nor am I a good indicator but I really liked the way the markets turned from the after hour rout to the close. A follow through day by Wednesday would confirm a change in trend, no? We did have some technical damage last week (as well as during the previous two). The OTC Bullish % reversed down Wednesday (notice how it took PnF a week and one half to confirm the trend). I would like to see this reverse up if we have the follow through day. If its only a few stocks leading the rally were back in March again. From the DWA site here is some information. The NYSE High-Low Index bottomed at 20% in February, just before we also saw a reversal up in the NYSE Bullish Percent. From February to its peak the NYSE High-Low Index rallied from 20% to 78%. During this time the Dow Jones was up 15.9% and the S&P 500 was up 15.5%. The NYSE High-Low Index has reversed down into a column of O's. With Wednesday's action, the NYSE High-Low continued to dip, falling to 62.70%. A reading of 54% would exceed a previous bottom and that would be the first time a column of O's has exceeded a previous column of O's on the NYSE High-Low chart since February. Now that the NYSE High-Low Index is on a sell signal and so is the NYSE Percent of Stocks Above Their 10 Week Moving Average, it tells us to expect these stocks to experience some rough roads and probably for the next couple of months. The OTC High-Low Index and OTC Percent of Stocks Above Their 10 Week Moving Averages are both on sell signals too, having given those sell signals on Monday. Those sell signals followed the OTC Bullish Percent reversing down last Wednesday. Friday's action did not change these indicators. On the NYSE, there are still 54.4% of the stocks posting negative returns for the year and over the last six months, 68.6% of the OTC stocks are posting a negative return. Means a lot of tax related selling can be in the wings. I am cautious. Also I’d like to introduce you to Rich. He joined up with the SI free period and he’s slowly learning how to navigate around. Tim