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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Lachesis Atropos who wrote (16066)	5/17/1998 8:43:00 PM
From: j g cordes	Read Replies (2) \| Respond to of 68400

Lachesis.. So what do we do with this data? OK, you've taken on half the problem and solved it.. the second half of the question is what do we want to do with the data. Stocks can make us money as they accelerate their rate of change up or down. Given that, we need to identify either sector changes over time relative to their own norms and play the acceleration of change up or down.. OR we need to identify the fastest moving sectors in their direction of trend, picking the most agressive candidates within the sectors. What we want to exclude, or put in a watch-for breakout pool, are dead positions... again breaking them down as having topped or bottomed. Some of these, when they break may do so most forcefully so this group is worth watching also. In summary, this is original because it will not assume the standard sector rotation model like Stovall does for example, but lets the data speak for itself. I've observed over the last ten years an accelerated adjustment cycle for surprizes and trend. The move is the same but the time frame is shorter. For example HWP nearly readjusted 14% on its earnings warning... all in a matter of hours, which in the past may have taken weeks to a month. If we are looking for an overall market correction (as some are) then what does HWP do.. go down another 15%? Instead of an overall market swing, the market seems to have devastating episodes by sector with money quickly finding another home that maintains the overall averages. Until gross capital inflows subside sector work will be more valuable. Hope this offers a direction. What are you running your simulations with? Jim

To: Lachesis Atropos who wrote (16066)	5/19/1998 10:40:00 PM
From: j g cordes	Read Replies (2) \| Respond to of 68400

Lachesis, I'd like to go back to something we previously discussed. You said "...Uncanny, but their seems to be a correlation of trends by sector; however, I am still skeptical." By this, did you think there wouldn't be? If it is true, there are some fun ways to approach this. One is that the success of the leadership attracts investors buying within the sector at all levels. For example the recent gains by BMY, PFE and WLA have stimulated investors to seek out comparable rewards in lower priced and early concept stocks. Another consideration is the ebb and flow of sector funds gaining investable dollars as the sector or its leadership does well. These passive investors are not your typical momentum players but effect the same results through their proxies. A question I'm curious about is the absolute value of inflow and outflow of money relative to price. I suspect if it takes a steady stream of say 50 million new dollars to move XYZ stock up 10 points over a month... it could take only 10 million relentlessly sold to drop the price back 10. I assume also you'll maintain the current data sifting through a useful period of time. If so, keep posting the results. Last, I've found a site which posts 45 second updates of 15 minute volume/price accelerations. Interesting, though 15 minutes of activity does not a good trade make. Jim