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Strategies & Market Trends : Contrarian Investing -- Ignore unavailable to you. Want to Upgrade?

To: Return to Sender who wrote (1386)	7/26/2007 12:39:04 PM
From: pcyhuang	Read Replies (1) \| Respond to of 4080

re: CPC RTS: I am not sure that I understand fully what are really shown on your chart. Here's a current intraday reading on the $CPC. stockcharts.com Now, as Vernie has pointed out that the spike on CPC has to be proved by a subsequent series of CPC, none hiher than the first. Only these group of CPC together would indicate that the market has had a "capitulated selling" day. Now we have had two almost equally high CPC, could it be that this be the scond day of the capitulated selling and that the market is due for a rally on Aug. 1, as Vernie has predicted. Now the logic of a high CPC reading an indication of overly pessimism is that the market participants are agressively buying put options relative to the buying of call options in anticipation of a further decline in the market. Of couse, most often we cannot rely on a single indicator. At the moment, all our twelve indicators, except the CPC are on their respective negative mode. So our market posture is negative, unitl the majority of our indicators show that we should change. pcyhuang

To: Return to Sender who wrote (1386)	7/28/2007 10:15:11 AM
From: pcyhuang	Read Replies (1) \| Respond to of 4080

Re: CPC + VIX RTS: It is interesting to note that the conventional put/call ratio has made consecutive higher spikes several days last week, so none of it can be considered as a "capitulated" selling day so far. On the other hand, the ISE call/put ratio, which measures public investors' interest in equities' options made a distinct low on Thursday, which can be interpreted as a "capitulaed selling" from the public sector. One may conclude, therefore, that the professional traders are even more consistently pessimistic than the public at large. More importantly, I think that the spike in CPC, combined with a spike in the VIX on Friday, is a very omnimous sign over the longer term despite of a potential short rally early next week. pcyhuang

To: Return to Sender who wrote (1386)	7/28/2007 10:16:06 AM
From: pcyhuang	Respond to of 4080

Deleted

To: Return to Sender who wrote (1386)	7/29/2007 9:10:25 AM
From: pcyhuang	Respond to of 4080

Re: Moving averages of CPC. RTS, you wrote: "... you have to follow the moving averages rather than one day events". Assuming that we are using a 5 days moving average, let's take a good of the following case: Suppose the high readings of the 5 days are as follows: 8, 8, 6, 18, 7, 9; total = 56; 5 day moving average = 11.2 You see the spike of 18 is smoothed out and is not shown. Now, however, if we use the weekly reading, it would be high 18, low 6; the two extremes have no place to hide. So my suggestion is to use the weekly data rather than the moving averages of the daily data. pcyhuang