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To: Warpfactor who wrote (16166)	8/22/2002 9:14:14 PM
From: pvz	Respond to of 23153

Warp, to reply to your last question first, Paul Shread posted a historical link to me on Monday: siliconinvestor.com The problem is one would have to wade through a lot of days to figure out whether we're currently at a historically low equity p-c ratio. By the way, I don't disagree with your stance of taking each day as it comes. Obviously, as long as the market is rising, that's the only profitable way to do it.

To: Warpfactor who wrote (16166)	8/22/2002 9:17:57 PM
From: Gottfried	Respond to of 23153

Warp, you can overlay McClellan and Nasdaq. stockcharts.com Just size the slider below the chart [left and right] to get the time period you want. Larry D. has annotated a Nasdaq chart with some od Dr Hed's recent calls investorshub.com Gottfried

To: Warpfactor who wrote (16166)	8/22/2002 9:44:37 PM
From: Gottfried	Respond to of 23153

Warp, P/C ratio on March 14. 2000 >On Friday, April 14, 2000, the day when the Dow fell 617 and the Nasdaq dropped 355 -- their worst plunges ever -- the equity put/call ratio hit 0.77. That high put/call ratio marked a short-term bottom in stock prices, as the Nasdaq and Dow rebounded sharply, registering huge gains the following Monday and for the next week.< thestreet.com We've seen much higher than 0.77 recently. but that's not equity only. stockcharts.com However, maybe we can use overall P/C to compare to March 2000 stockcharts.com Or, look at P/C alone and compare then and now. You'll see P/C has been creeping up steadily stockcharts.com[w,a]waclyiay[df][pb30!d20,2!f][vc60][iut!Ub14!Lp14,3,3!Lf!Lk14]&pref=G G.

To: Warpfactor who wrote (16166)	8/22/2002 10:15:14 PM
From: pvz	Respond to of 23153

Warp, I noticed the apparent discrepancy on the McClellan in the Oct 01 rally as well. I came to the conclusion that it simply meant the indices had rallied significantly without pulling back. Coming off of Armageddon lows, that doesn't necessarily have to mean overbought. I would agree with you that there is nothing necessarily bearish about the extreme high reading of the oscillator. My line of thinking is being fueled more from an Elliot Wave point of view. [I mentioned a little while ago that I had been studying it; I just hope I don't turn too EW-religious on this good crowd, lol] I think the link below shows some of the most convincing easy-to-read charts. In particular, look at the 2nd and 3rd charts in the series: stockcharts.com Look at the steadily falling PPO throughout this rally. I guess it signifies a giant type of triangle which is drawing to an end. In a very bullish case could theoretically burst into a new bull move. However, without getting too caught up in E-wave counts, I consider a bearish ending to be more likely because of the falling volume and the rising wedges in not only the indices but also many, if not most, large cap issues. Secondly, I wanted to point out something that happened today. The Sox was down. But the move from Aug 8 to today's high equalled 1.618 times the move from July 24 to August 8. Of course that could be negated tomorrow if the Sox shoots up to new highs, but until that happens, this particular Fib relationship bears watching very carefully and could suggest the high has been reached. Lastly you said <The current rally as it is developing has signs of an early bull>. The evidence you presented does point in that direction. Yet all the E-wave counts I have seen would disagree with this premise. They don't all agree with where the exact wave count is, but there seems to be universal agreement that the current rally is corrective. The first clue that it is corrective came when the very first move off the lows came in 3 waves and not 5. In a 6 word nutshell, it means the rally is doomed. It doesn't preclude some further significant gains, however. I just wanted to point out that I don't believe at this point that this is likely to be an early bull. I hope this somewhat clarified my thinking and not the opposite.

To: Warpfactor who wrote (16166)	8/22/2002 10:20:50 PM
From: Gottfried	Read Replies (3) \| Respond to of 23153

Warp, here's equity P/C vs SPX. vtoreport.com If that were the only indicator, then the raly should continue [not for long]. But Dr Hed is turning bearish - something hard to ignore. G.

To: Warpfactor who wrote (16166)	8/22/2002 10:49:32 PM
From: Warpfactor	Read Replies (2) \| Respond to of 23153

Equity Put/Call ratio analysis: I believe that there is some rule that says a "corrective" day (or two) are in order if the Equity P/C ratio is lower than 0.45 I think. Maybe someone can elaborate?? There are some other rules saying that market turns are portended by the X-day moving average of the Equity P/C ratio getting blow Y threshold. Can someone fill in X and Y??? Todays Equity P/C ratio is 0.41, and yesterdays was 0.49. So as PVZ says, last Friday we had a 0.39, which was the lowest since August 31st 2000??? I will check this out myself, but not right now. Let's look at the Equity P/C ratio during the 1998 post-armageddon rally. I dug through the CBOE website, and calculated the Equity P/C ratio from Oct 15 to Nov 30 1998. The data is below. Analysis: Premise - the current rally is similar to 1998. 1998 went for a month and a half (mid Oct to end Nov) before a meaningful down day on Nov 30 (a Monday after Thanksgiving). Bears of that time probably looked at Oct 16th and 19th ratio's (0.41 and 0.42) and decided that the end is near. What they got on Oct 20th was a big gap up followed by a plunge. Day ends with NAZ down probably 10 pts. That was the selloff. Fast forward to early November, bears looks at Nov 2 (0.37 equity P/C ratio) and Nov 5 (0.39). This is really it this time!!! What they got was a 3 day selloff of maybe 15-20 Nasdaq points. Then back up. Fast forward again to late November. From Nov 20 - Nov 27th the following series: 0.35, 0.35, 0.39, 0.40, 0.30!!! That 0.30 finally produced a 60 pt hit taking the NAZ from 2010-1950. Conclusion: Given that we are in a post-armageddon recovery, I believe that it is prudent to relax your rules regarding the use of the Equity P/C ratio. August 31st 2000 was the double top of the NAZ summer relief rally. Currently we are in a scenario coming off a nadir which is totally opposite. As the 1998 data below supports, low Equity P/C ratio's under such a scenario should outright be expected. We could see several more weeks of E P/C's in the 30's and 40's. Oct 15 - 0.54 16 - 0.41 17 - 0.42 19 - 0.42 20 - 0.46 21 - 0.55 22 - 0.50 23 - 0.48 26 - 0.44 27 - 0.50 28 - 0.48 29 - 0.56 30 - 0.46 Nov 2 - 0.37 3 - 0.47 4 - 0.50 5 - 0.39 6 - 0.42 9 - 0.46 10 - 0.50 11 - 0.47 12 - 0.52 13 - 0.46 16 - 0.52 17 - 0.41 18 - 0.40 19 - 0.41 20 - 0.35 23 - 0.35 24 - 0.39 25 - 0.40 27 - 0.30 30 - 0.42