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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA -- Ignore unavailable to you. Want to Upgrade?

To: High Country Trader who wrote (12428)	5/28/2002 9:26:57 AM
From: High-Tech East	Read Replies (3) \| Respond to of 19219

HCT ... what do you think of what John Hussman has to say? ... he, Stephen Roach and ContraryInvestor.com (to whom he refers here) have been much on target since late 2000 ... Thanks, Ken Wilson Monday May 27, 2002 : Hotline Update The Market Climate remains on a Warning condition. This condition is defined by a combination of unfavorable valuation and unfavorable trend uniformity. I continue to view the advance off of the September low as a counter-trend rally in an ongoing bear market. My opinion is that the major indices will eventually fall below their September troughs. While we did see a strong reversal off of the September low (allowing us to reduce our hedges by as much as 20%), the market never recruited trend uniformity. Basically, stocks launched off of the September low in unison, and then immediately began developing important divergences. Interestingly, Lowry's ( www.lowrysreports.com) notes that the September low differed from more durable lows in that we never saw a swing in what they call "90% days." Usually, bear market lows are preceded by a series of days in which down-volume represents at least 90% of up-volume and down-volume taken together, and the number of down-points among NYSE stocks represents at least 90% of up-points and down-points taken together. In general, a new bull market often follows the final 90% down-day with a 90% up-day just a few trading sessions later. The series of 90% down-days followed by a 90% up-day is taken by Lowry's as a signal of a completed washout, which often marks the start of a new bull market. The September low did not produce this, which makes Lowry's also believe that the bottom is not in place. Among other indicators based on internal action, I noted that the 10-day average of the trading index (TRIN) had moved above 1.5 a couple of weeks ago. Part of my concern with this high reading is that it was not accompanied by any extreme of bearish sentiment (for example, a high proportion of bearish investment advisors or a spike in the CBOE volatility index). Normally, a 10-day TRIN above 1.5 is a measure of capitulation. The recent reading, emerging with high levels of bullishness among investment advisories and brokerage strategists, is more suggestive of distribution in large cap stocks, rather than capitulation. In short, the recent high TRIN strikes me as a danger signal, not a positive development. On the economy, I continue to be in fairly thin company in my concern about the durability of economic strength. It's odd to see investors demanding aggressive cost cutting to improve profit margins, yet not realizing that if this is done economy-wide, those efforts will aggregate into greater job losses and weaker capital spending overall. Stephen Roach of Morgan Stanley is among the few analysts who seems to carry the same opinion. Also, there's an interesting commentary on contraryinvestor.com. It's one of the few places where I've seen comments about the continuing and almost surreal weakness in the Help Wanted Advertising Index. Of course, we need no forecasts in order to carry a defensive position here. The current unfavorable status of valuations and trend uniformity is enough. We remain fully hedged. http://hsgfx:reciprocal@www.hussman.com/hussman/members/updates/latest.htm

To: High Country Trader who wrote (12428)	5/28/2002 9:27:14 AM
From: HairBall	Respond to of 19219

HCT: Astute observations...

To: High Country Trader who wrote (12428)	6/3/2002 12:37:56 AM
From: J.T.	Read Replies (7) \| Respond to of 19219

The NYSE Members Net Balance Index has now matched 1995 (you are correct(not 1994)) 14 out of the last 15 consecutive weeks of net buying of now 752 + Million Shares common stock. The boyz are going for a cool BILLION. Now, you and I both know this indicator has registered such rare buy signals and 'unerringly' called the greatest buying points of each decade or generation in the stock market since the 1940's. In 1942, after NYSE member net buying came in, the DOW more than doubled in 3 1/2 years. In addition there was a fourfold upmove in the total return unweighted indexes in this same time period. NYSE Member net buying in 1949 kicked off a monster 17 year bull market that saw a greater than fivefold return in the DOW from below DOW 200 to DOW 1,000+ in 1966. Again, NYSE Member constant net buying throughout 1974 during the latter half the great Bear Market in 73-74. What happened? After the DOW bottomed in December 74 around DOW 577 it screamed higher to DOW 881 by July 1975 less than 8 months later and above DOW 1,000 again in 1976. SPX went from 65 to 95 in July 75 and up to 105 in 1976. Ditto for 1995. After NYSE net buying, the DOW went from DOW 4,600 in June/July 95 when buying commenced(DOW 5,100 Dec 95 when the NYSE member buying splurge ended) to 10,000 by late March 1999. The bottom line: This indicator has NEVER FAILED. And just as the bagholders have been duped again at the top, they are now swearing off stocks in droves at this ending bottom. And guess who is there doing the bagholders ' a favor' quietly sucking up all the supply of stock buying at 80% 90% 95% + discounts to old all time highs. The irony is that we have a multitude of powderkeg combinations never seen before working together to cause this impending massive short squeeze and upside blast-off. In addition to the NYSE members net buying, the public continues to short above the specialists week after week since the first week of January. This did not happen at the same time but a year apart in 1994 and 1995 as your correctly pointed out. Also, The COT Report commitment of traders has been net short for some time as they continue their massive short orgy conundrum. Lastly, insiders have been net sellers for some time and no net new buying has yet commenced. This is extremely positive and several examples bear this out with a little history. In March 1980, Bache was begging to get taken out by the highest bidder at $8 per share. Everybody laughed. Less than two years later, Prudential Life loved Bache and paid $32 bucks a share for it. Sears didn't want Dean Witter in the dumps at $8.50, but loved the company at $52 bucks. The point is, is that most insiders don't step up to the plate to buy when the going gets tough and they don't see the turnaround on the imminent horizon. It is an explosive mix. Rare buying by the NYSE members, public shorting over the specialists week after week, COT massively short stock they don't have and MUST buy back (they hope at lower prices), and no insider buying. What is left? A spark that lights the melt-up MOTHER OF ALL SQUEEZES. Just like on August 17, 1982. Buying enthusiasm was replaced by buying frenzy; which was quickly replaced by buying panic. What was the up/down volume that day 19/1 or 24/1 Buyers vs. Sellers? This time it will be a mother lode SHORT Squeeze panic. And one last thing: Forget about all the malarchy about the accounting woes weighing down the market much more Enronitis ad nauseam. It always happens at important bottoms. In 1974, the FASB was barely two years old and trying to get organized to deal with the widespread discontent with its predecessor group - the Accounting Principles Board. Remember the APB? They were comprised of an 18 member board dominated by "The Big 8 Accounting Firms". In 1982 midyear, the accounting alchemy of the S & L associations debacle lost a cool 2 Billion dollars as 222 S & L Banks were predicted to run out of capital by years end if interest rates did not fall... The sky did not fall and the world did not end. But a new Bull market was born out of the ashes of death. The economic data coming out over the last 6 months screams of a melt-up to back it all up... but I am just ranting with biased multiple LONG positions. <g> Best Regards, J.T.

To: High Country Trader who wrote (12428)	6/13/2002 3:35:11 PM
From: J.T.	Read Replies (2) \| Respond to of 19219

J.T., I believe the net balance index hit a record back in 1974 when during a 47 week period (February - December) there was net buying in 44 weeks. I know where you got this information from and it is incorrect. It was 39 out of 47 weeks net buying in the February thru December 1974 period. And the public shorted above the specialists in every one of those NYSE member net buying weeks. Again, only 4 weeks of public buying above the NYSE members in this same time frame. Furthermore, with a little more dd you will find in 1973 shorting activity by the public above the specialists very similar although not as great to 2000 and 2001. Moreover, the NYSE member net balance index was also early in 1973 with a net 25 + weeks of buying. In 2002, I made a minor error. So far thru reporting 21 weeks, (not 22 weeks), the public shorting above the specialists is 21/21, net NYSE member buying is 17/21, and public shorting above the NYSE members is 5/21. So in essence, the net percentage shorting comparison shows 2002 more brisk relative to 1974. Hope you are enjoying your lurk mode and public posting retrenchment. <g> Best Regards,J.T.