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Technology Stocks : Jabil Circuit (JBL) -- Ignore unavailable to you. Want to Upgrade?

To: Asymmetric who wrote (6138)	11/8/2002 12:37:28 PM
From: OldAIMGuy	Read Replies (4) \| Respond to of 6317

Hi PQ, I have a general market risk indicator that I developed in the '80s that I use to track what's going on overall. I plot it against the NASDAQ Comp. as a point of reference. It includes four components, Relative Valuation, Speculation, Investor Divergent Thinking and IPO Zeal. There's a nice correlation between low and high risk events and market movement. Unfortunately the data doesn't go back to a period like 1969 to 1982, but it may be instructive anyway. The first graph shows the period from 1982 to 1998. aim-users.com Note that there's not very many Low Risk periods in all of that time. Well, we were in the midst of a rousing Bull market most of that time with the exception of some lumps and bumps here and there. I apologize for the massive cramming of data into a single graph, but want to show the LT history. This second graph is of about the last five years showing the latest Low Risk event. aim-users.com We are in Week 17 of this event. It has taken the IW value to the lowest level ever seen in all the time I've been keeping this data. Note that it also put in a record High Risk reading in March of 2000. It seems only natural that if the pendulum is going to swing out too far in one direction that it will also swing back too far. I think that is what we saw in the first week of October. Considering the IW didn't drop to Low Risk for all the time between the March, 2000 and pre-WTC/Pentagon attacks shows that most of that time was bear market or bear traps. It took that disaster to finally lower the IW into Low Risk range. It then popped back to High Risk in a knee jerk fashion by Jan. of 2002. I think we would have eventually dropped the IW to Low Risk and the markets to their recent lows even without the WTC/Pentagon attacks. However, the timing was interrupted. This latest drop was more in line with what we should have had anyway. Weak hands were flushed out in different phases because of last year's attacks and this years scandals. It is of interest that each Low Risk period has had its own circumstances and has lasted various lengths. Here's a quick summary: Time Consecutively At Low Risk 6 weeks - Fall 1998 8 weeks - 9/11/2001 16 weeks - Fall/Winter 1987 21 weeks - Fall/Winter 1990 17 weeks so far - Summer/Fall 2002 For 15 of the 17 weeks of this Low Risk period all four components were in their own Bullish territories. I point this out because it's rare when all four components are in harmony, especially for that length of time. If you would like to see more on the components themselves, they are shown at: aim-users.com So, does this mean that there's going to be a huge rally and a return to the Bull days from 1982 to 2000? I really can't say. I would venture to say that this current upward turn which started a month ago could last for a while yet. When the data from the last few weeks starts to impact the IW's raw and smoothed calculations (there's a data lag of up to two weeks with part of the components) we're going back into the Average Risk range quickly. That might be just a few weeks away. A return to High Risk could easily follow if the rally continues. It responds to "Too much, too fast!" quite nicely. I offer this info to the group as a way to counter-balance the general feel of the less optimistic pronouncements being made in the press. Where were the BEARS when the investors needed them? James Stack (Investech Research) was there in late 1999 and early 2000 preaching that "the end is near!" but nobody wanted to listen. My Idiot Wave was singing harmony with him. His presentation at the Feb. 2000 Money Show in Orlando titled "Is It A Bubble?" hit the nail on the head. Much of this is in a PDF file at bearmarketcentral.com ) He also handed out at that time another sheet titled 7 Conditions That Preceded The "Best Buy" Opportunities In Stocks (read more at gold-eagle.com ) Here they are: 1. Positive Shift in Monetary Policy (we've had that for a long time with declining Fed rates) 2. More than 6 months of Negative Leadership "distribution" (I think we passed that about two years ago! It has to do with the # of new lows vs new highs, I believe) 3. Bullish Bond Market Reversal (if I understand this one, money must start drifting away from bonds; we've not yet seen this, I believe but check at "Trim Tabs" weekly to see) 4. Coppock Guide near "0" (I can't find a current reading. I did find that it gave a "false" bullish signal last July, the first such bad signal in 50 years. That dip coincided with when my IW finally descended to Low Risk. Definition: "A 10-month weighted moving average of the sum of the 14-month rate of change and the 11-month rate of change for the DJIA." from investopedia.com) 5. Plunge in Consumer Confidence (Marked by a drop of 35 points or more in this fiture as reported by The Conference Board. This is currently at the lowest level since 1993 but was flying high in 2000; more at conference-board.org ) 6. "Formal" recession (we had that and may yet have the dreaded "double dip.") 7. Greater than a 20% decline in the DJIA (done! quite some time ago) So, where Mr. Stack saw only one of the seven "in place" for a market move upward in February of 2000, it would appear that most are now in place. Even in November of 2000 still only one was showing bullish with a second starting to. I don't subscribe to Mr. Stack's newsletter, so don't know if he's now switched from being exceedingly bearish to bullish. It would appear that many of his seven favorites have become bullish and that concurs with my IW's four components. Can the world still come to an end? Yep. Is it likely? No more than usual. Will JBL survive? I think so. Sorry to be so long winded this AM! Best regards, Tom