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Strategies & Market Trends : Stock Attack II - A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Justa Werkenstiff who wrote (20011)	9/26/2001 7:40:35 AM
From: donald sew	Read Replies (1) \| Respond to of 52237

Justa, >>>> I might be concerned with this point as it sounds reasonable. BUT one should note that during the April 4th bottom, the SOX not only lagged by a few days, but it also retested its lows on April 9th whereas the COMP did not. The COMP gapped up and did not look back. The COMP lead that rally; the SOX followed. So it is reasonable to think then that the SOX must participate but does not have to lead the initial up. <<<< Thanks for pointing that out about the SOX. Granted that the SOX doesnt always need to lead, but as we both agree, the SOX eventually needs to kick in for a rally in the NAZ/NDX to have legs. >>>> I don't view a VIX at the 40 level as a sell signal at this point. We are close to the VIX levels at the April highs. Still a good deal of fear here. Looking at the 1998 initial low of August 31st and then the retest of mid October 1998, the sell signal on the VIX was 30 and change which corresponded with the high in the interlude rally before the retest. During that interlude rally, the VIX jumped around in random fashion <<<< I apply my short-term technicals to the VIX, and it has actually been a very statististically reliable indicator for the overall market, and at times even more reliable than the individual indices. I have seen in the past, where my short-term technicals on the indices do not get to the extreme levels of a CLASS 1 SIGNAL, whether its a buy or sell, while my readings on the VIX are at the extreme of a CLASS 1 signal. Its a flip of a coin(about 50:50) that the indices turn before they ring a CLASS 1 SIGNAL, so in about half of those situations the CLASS 1 SIGNAL in the VIX actually lead the market. Having said that and as mentioned previously, of those instances where the VIX readings led the indices, a few of those moves were only a small oscillation in the opposite direction of the immediate move/short-term trend. I prefer not to use absolute values when viewing the VIX, since I normally look for the short-term swings.

To: Justa Werkenstiff who wrote (20011)	9/26/2001 8:00:23 AM
From: Paul Shread	Read Replies (1) \| Respond to of 52237

>>We are close to the VIX levels at the April highs<< Old tops make good bottoms, and the VIX has been in a strong uptrend since late August. What if the VIX still has another leg or two up? stockcharts.com[l,a]daclyymy[d20010301,20010925][pb50!b200!b20][vc60][iLl14!La12,26,9] A simple retest of that 57 area would do more to cement a bottom than a single spike, IMHO.

To: Justa Werkenstiff who wrote (20011)	9/26/2001 8:04:32 AM
From: donald sew	Read Replies (2) \| Respond to of 52237

Justa, >>>> Normally, I might be concerned with this point as it sounds reasonable. BUT one should note that during the April 4th bottom, the SOX not only lagged by a few days, but it also retested its lows on April 9th whereas the COMP did not. The COMP gapped up and did not look back. The COMP lead that rally; the SOX followed. So it is reasonable to think then that the SOX must participate but does not have to lead the initial up <<<< Forgot to mention something in my previous post. Again, your comment is valid. However, all it proves is that nothing is 100%, and does not invalidate that the SOX is a reliable leading indicator, since it may have failed to lead with any significance a few times. So the question becomes - if there is a pattern that occurs with good reliability/probability, but there is a time when it did not work - should we say that the original pattern is no longer valid. In no way am I saying that you said that or even imply that. The reason I mention that is with a failure of a pattern we should reanalyze the probability of the original pattern, since the failure may be a hint that the probability of that pattern may be changing. Another possibility is that such failure may not be within the normal parameters of the pattern. As you stated previously, the SOX did not lead at the APRIL bottom. It may be possible that with EXTREME SELLOFFs, the SOX may not have to lead. If that continues and becomes statistically viable, then a subset of the original pattern needs to be established just for EXTREME MOVES. Gosh, after rereading my post, now I know why my kids always say that I over analyze things to death.gggggggggggg