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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: bearshark who wrote (12971)	1/10/1998 12:43:00 PM
From: James F. Hopkins	Read Replies (1) \| Respond to of 94695

Bearshark: I read it fast and think he is onto something, but will have to study on it more. As he is looking at some things I haven't had time to look at. Generaly I frown on using TA on an INDEX , Indexes can lie and garbage in garbage out. TA is good in it's place, on indivdual stocks..or maybe on a self made index, that would have to track the price/voulme change of each issue inside the index, as some strange things can happen inside the index. Short term I see the NYSE TICK as a GOOD INDICATOR. Chart that and compare it to the S&P. MEGA caps lead the pack , and the pack often keeps running after the MEGA caps turn, but the pack will in time turn back and follow the MEGA caps , it's when the tail wags the dog ( thinly traded stocks move the index opposite from the direction of the mega caps ) that you can get ready for a reversal. LOOK at where GE, KO, XON and MSFT hit their tops, and you'l see these giants signaled a down turn way back in July AUG. The OCT27 sell off was the tail catching uop with the big dogs, we are in a bear market, no rally will hold if these MEGA caps can't take out their mid summer highs with some volume and conviction. The real market peaked and was on the way down, long before the OCT27th sell off. The mega caps move slower but they are the thing to watch, if you want to know the general direction of the market. If they reverse on an average their trend, then the bottom is close, and the others will sooner or later follow, right now it's still down trending, rallies are weak, and with little conviction ( volume ) just causing hangeroners to go broke slowly. It's really bad because in this type of bear market, individaul stocks often get taken out behind the barn by the funds and shot at night or before the market opens, and the individuall investor gets it up the anal before he knows what happened. Jim