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

To: Tom Byron who wrote (34419)	9/24/2001 12:20:54 AM
From: Johnny Canuck	Respond to of 67977

Hi Tom, I don't put a lot of weigh on a chart for an index or related measures that extend back that far. Keep in mind that the SP500 like a lot of indices are a rigged game. It get edited on a yearly, bi-yearly etc... basis to add winners and remove dogs, that is why you see a positive rising bias on the chart. All it really reflects is that some part of the economy is doing well over time. If you look at the middle trend line, it does not get tested that many times on the down side so it is not a good indicator or support. On the three occasion it did test the middle trend line (1953, 1969 and 1970) It broke two of three times. The middle trend line has more significance as a resistance level in the last few years as it was tested many time during the mid-1980's to mid-1990's. The outer trend lines might be a good measure of the range of extreme reading in the A/D line. I would be careful relying on this indicator as an market timing signal though.