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

To: Abner Hosmer who wrote (71242)	3/5/2001 11:46:20 PM
From: Psycho-Social	Respond to of 99985

Re Merrill Lynch Sell Side Indicator: I've heard one of their chief strategists mention it several times. I have maintained a similar indicator of Asset Allocation Recommendations of the top 10 brokerage firms since late 87, but I've kind of abandoned it as not being that useful anymore. I never did really trade on it. Between late 87 and the end of 91, when it went from 41.6% to 65.2%, it showed some promise from an intermediate to long term standpoint. It gave a "too little too late" response between late 93 and early 95, though, when it dropped from 64% to only to 52%. It really fell apart after that as the Asset Allocation Recom have generally risen slowly since then. There was nothing even remotely resembling a buy signal at the late summer/early fall 98 lows, nor at the August or October 99 lows. When I stopped charting it in the 3rd Q 2000, it was at an all-time high of 66%. In general, I've found in my own indicators that intermediate term forecasts (which is what those asset allocation recom are.) are losing their potency as indicators. So, if you plan to use the Merrill Lynch indicator, I would suggest you closely examine a graph of their data since 98 to see if it gave buy signals at the 98 or 99 lows.