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

To: Barbara Barry who wrote (22183)	7/24/1998 12:49:00 AM
From: James F. Hopkins	Respond to of 94695

Barbara; Here is another chart, quicken.excite.com This is the MDY which tracks the S&P Mid Cap, now if you go back over a year it loses prespective. Also the Mid Cap over time under performs the S&P, BUT there is divergence and convergence that is very relative to how things work. Note just before OCT how the MID cap rate of gain was going up faster that the rate of gain in the 500..if you do take it back more while they don't over lay one anther , you can see ( if you look close ) that the mid caps converged towards the 500 before any major pull back. It helps if you do a year to date, quicken.excite.com a good bit of divergence .. My idea is tath some of the Mid Caps are also in the S&P , Now while the MIDs are more volatile, after the Blue Chips run up, then there is a sort of consolidation were funds move some money down stream looking for better PEs and the Mid Caps pick up & converge towards the 500, in fact the rate for short times can have them out doing the 500 ...then the bigger sell off comes. Well tahts the pattern so far , and I doubt this will be the exception. I'm inclined to think that the money coming out of the Nifty Fifty is going to work it's way down stream before the bull run really pulls back. When things start up this time the MDY may turn into a better bet than the SPY. I'll be looking at other indicators but from taht divergence, I think we are subject to be getting set up for a run up next week, IF we don't break down to bad and the 500 start back up, the MDY should fly. quicken.excite.com Jim