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

To: William H Huebl who wrote (18600)	5/16/1998 6:59:00 PM
From: James F. Hopkins	Read Replies (2) \| Respond to of 94695

Bill; In as much to market time one needs to look at many indicators it is helpful to toss out indicators that don't produce some type of reliable result that matches the market over time. The A/D ( advance decline ) line or average is just about the most unreliable I have found so far..it is pure crap. My guess is that it does not take into account the volume connected with the advance or decline ratio but just sums up how many gained to how many went down..and has little to do with cash flow. Some of the worst errors I've found are connected to the A/D.. however the NEW HIGHS to NEW LOWS works OK ..with a mid point at about 80% it mostly depends on if the NEW HIGH RATIO is going up or DOWN..more than were it is at. Do your self a favor FORGET the Advance / Decline ratio..to many other things to look at, after my home work I don't just think it's silly , I know it is. Any guru can go back and make the A/D fit here and there.. but over time it lies as much as it tells the truth. Hell it don't even fit the tick half the time, I guess you might use it in a way were if you see it the TICK going against the A/D ie tick down A/D up you could have a tip off to short..or tick up A/D down a tip to go long.. BUT I have not tested it aginst the tick this way so I don't know, and don't suggest it What I do know is that the A/D does not conform in any reliable way to predict the market..it trails and it trails so far as to really mess you up at times. CNBC and their market gurus tend to place a lot of weight on the A/D as they spin out their anal-cyst as you can get the herd to belive a big lie easyer than a small one. Mind you the market cap of this market peaked April 4th-5th.. the recent hype about falling A/D goes to show how far it trails, The market has about 2 months from it's market cap high ( not always shown by broad indexes ) to make a new market cap high or it's in troble via derivatives vs interest rates..I do not think we can get market cap up enough by June 5th or June 8th to stop a correction, that will be deeper than what we saw on April 28th. The ^hfx2 is now 378.52..it must climb to 400 or above by June 5th or 8th..or the derivative part of the market will be in trouble, and stocks will sell off to salvage it. Jim