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

To: Investor2 who wrote (13688)	1/31/1998 8:42:00 AM
From: bearshark	Read Replies (3) \| Respond to of 94695

Hi I2: You can find the ARMs index (trin) at quote.yahoo.com Go to the New York Stock Exchange section on that page and you will see the ARMs listed. At the close of the day, it will show the closing ARMs. However, during the day it will give you the ARMs during the day. This is of some value for day trading--as Paulo noted once. There are a number of ways people calculate the 5-day ARMs, however they are all geared to the same thing. I collect the closing ARMs data each day. For example, if the closing ARMs for the last five days were; .95, .98, 1.05, 1.1, and .98, you would get a 5-day ARMs of 5.06. That is a neutral ARMs which says your guess is as good as mine about the future direction. However, if you get an ARMs reading of 4.0 or lower, you have a good shot at a decline (overbought). If you get an ARMs reading above 6.0--I like the mid 6s--you have an opportunity for a rally (oversold). You should be able to find examples of my overbought and oversold conditions in past notes. I remember one just before the Santa Claus rally started on 12/23 or 12/24. Unfortunately, the ARMs is not perfect. It has worked beautifully in this consolidation period. However, as I noted in one of my notes, it is not that great in extreme conditions. Also, you cannot tell if you will have a 100 or 600 point move. For example, on 1/20/98 we had a 4.0, 5-day ARMs. The DJI closed that day at 7873 and dropped to 7,700--183 points. On 12/24, we had a 5-day reading of 6.75 and the DJI closed that day at 7660 then went to 7915. Within two days, we had a reading of 3.72 and a close of 7965 then we went to 7580. The one I like the most was on 11/12/97 when we had a reading of 6.48 and a close of 7401--well it went to 8149 on 12/5/97 without ever giving an overbought signal. This is what I call performance and what I demand from an investment of my time. I also use a 10-day and 20-day ARMs but I have not found them necessary. The DJX can be played with the ARMs. You can have the protection of a 6-month options-life and a 200 point move in the DJI will make you profitable. I appreciate your notes and I appreciate the gentle questioning of posters.