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Strategies & Market Trends : A.I.M Users Group Bulletin Board -- Ignore unavailable to you. Want to Upgrade?

To: aptus who wrote (14043)	12/21/2000 2:34:12 PM
From: OldAIMGuy	Respond to of 18928

Hi Mark, I'll look up the email and get details. I hope I quoted him correctly. Best regards, Tom

To: aptus who wrote (14043)	12/21/2000 5:11:23 PM
From: OldAIMGuy	Respond to of 18928

Hi Mark, <Food For Thought Dept. (special thanks to Jon G. for this work)> Jon, the fellow who was working with the IW history, had only four occasions where he side-stepped the market since 1982. In each case the IW reached 53 as the "sell point" and he then avoided the market until the IW was below 42 before buying back. ------------------------------------ "Thanks once again for letting me have access to the data. <My study> is based on the premise that the Idiot Wave is a better measure of the state of the market than the price of the market itself, and so can predict movements in the market. The model assumes buying $10,000 of "NASDAQ Index" on 1/1/82. The index is sold and moved into cash whenever the IW goes above 53, and is bought back once the IW drops below 42. The model prescribes moving to cash on four occasions only. They are: Start End Market Drop July 15 1983 March 9 1984 -20% August 7 1987 November 6 1987 -26% May 4 1998 September 14 1998 -12% March 13 2000 May 29 2000 -36% Getting out of the market during these periods has the dramatic affect of increasing the total return over the whole period from 18.75 fold to 57.57 fold, i.e. $10000 becomes over $575,000 instead of $187,500." --------------------------- Now, how about that? Interesting, isn't it? Too bad I'd not invented the IW back in 1982!!! However, it wasn't long after that I noticed the first component's interesting correlation to the market. I started following Value Line's Best and Worst Stocks lists just about 1985. For a very long time I hesitated to use the IW's information in conjunction with AIM. It wasn't until 1995 that it became a part of my efforts to maximize AIM's effectiveness. That's when I shifted my IRA Equity/Cash ratio from about 50/50 to what the IW was suggesting for mutual funds - about 67% invested, 33% cash. That revitalized that particular mutual fund account. aim-users.com (look for the change in Jan. of 1995) Since then I've gained in confidence in its ability to read the market's tea leaves. Best regards, Tom