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Strategies & Market Trends : LindyBill's Ballroom -- Ignore unavailable to you. Want to Upgrade?

To: LindyBill who wrote (83)	10/2/2001 3:49:51 PM
From: OZ	Respond to of 248

Well I just wanted to let you know that what we do is very carefully set out in math as to risk and reward and not in voodoo as many think. But in general terms, your risk needs to be smaller than your reward to stay in the game. BTW I too shorted about 20 stocks today in the first rally after the announcement and covered them pretty quickly of a decent gain. Oz

To: LindyBill who wrote (83)	10/2/2001 4:18:24 PM
From: Robin Plunder	Read Replies (2) \| Respond to of 248

Lindybill, it seems that many of the market indicators are pointing towards a bottom here. Here are a few items to consider: 10 day moving average of the arms index hit 1.5 or greater three times this year. Normally after this indicator hits 1.5, the market makes a bottom within 20 trading days. A week ago last friday was the 20th trading day from the second signal. (another signal was registered on the first trading day after the WTC disaster...this unprecedented third event was probably triggered by the terrorist event.) Hays smartmoney index has been positive since last march, after being strongly negative last fall. The put/call ratio, both on a single day basis and on a 15 day moving average basis, has reached record or near record levels recently. The yield curve is at a record level of bullishness. Valuations have reached levels of 16% undervalued (according to IBES model). According to marginmike, insider buying is at very high levels. The economy looks awful, and it seems that the consumer can only weaken, but these psychological, monetary, and valuation indicators usually indicate a market turn before a turn in the economy is visible. Quite possibly the market could meander for a while at this point, but the next move should be up, according to these indicators. I am not pushing this view too hard, but it would be painful to be short this market if it starts to recover, especially after having taken a beating in the last year and a half. I am curious if you use such indicators to formulate your market view, or if you are going by gut feel. I used to go by gut feel, but this bear market has convinced me that I need something more reliable. Good Premises, Robin