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Strategies & Market Trends : A.I.M Users Group Bulletin Board -- Ignore unavailable to you. Want to Upgrade?

To: D VanSwol who wrote (4447)	4/9/1998 5:48:00 PM
From: OldAIMGuy	Respond to of 18928

Hi Dennis, One of the components is still in the Low Risk area - ZEAL - but two are now High Risk with the last Ave. Risk. The sum total is in the High Risk area as of this week. The risk level has been rising for several weeks and has given "early warning" signals for the last 3 or 4 weeks. I feel that a true market signal is when all four components are in accord, but we haven't had one of those times since 1990! I've found in the past that the IW can indicate High Risk for quite a while before the market recognized the problems of the market. I've had 3 or 4 months of High Risk signals before its proved out. The market has a "too much, too fast" feel to it right now. Lucent has doubled since it split about a month ago. !?! Did their sales, earnings and book value also double? The market probably needs a bit of a rest. AIM wants you to sell into the rallies so you can buy into the valleys. Take a look at the downside risk of the equities you own and then make adjustments to the cash reserve as needed. Rule of thumb is that if a stock falls 50% it needs a 50% cash reserve to still be buying at the bottom. The other course is to just sell into any further strength and build your cash reserve as the prices rise. The choice is up to you. Hope this helps, Tom