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To: Les H who wrote (8443)	8/21/2003 8:10:52 PM
From: Chris McConnel	Respond to of 29604

Evidence Grows for Market Pullback By Dick Arms Special to RealMoney.com 08/21/2003 08:19 AM EDT A week ago, the numbers were suggesting that the markets were about to move lower. We had overbought Arms Index levels and a very low reading on the options market volatility index, or VIX. Now, a week later, instead of moving lower, the Dow has added another 100 points and has pushed a little above prior highs. However, the indicators are still telling us much the same thing. The Arms Index, which was quite overbought, is even more so. The VIX has gone to an even lower level. In fact, in breaking below 20, it has given readings not seen in more than a year. Such a level of complacency strongly warns of an overdone condition. The five-day Arms Index was at 0.89 a week ago, while the 10-day was at 1.00. Now the 10-day has joined the five-day at 0.89. The last time the 10-day was in this vicinity was mid-January, just before the slide began that carried us to the March lows. I don't think the move above the highs Monday was a legitimate breakout, due to the lack of volume and the overbought condition of many indicators In addition, the Nasdaq and the S&P didn't produce a similar move. Yesterday's pullback makes it look as though we're still within a consolidation period that is now more than two months old. I continue to be very cautious. thestreet.com