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

To: coug who wrote (22280)	7/25/1998 1:39:00 AM
From: James F. Hopkins	Read Replies (1) \| Respond to of 94695

Coug; As long as you understand your own indicators and use several, and avoid thinking any one of them is some holy grail you will find a style that fit's you. I'm a big believer in that not one size shoe fit's every one. As for the volume vs price change to get money flow I tried that and soon found out it don't really work, at least it's not reliable. If you look at many interday charts you can see that often the most volume may trade at or near the high or low, with the start or end being a gap up or down on very little volume. ( this can also toss a curve in candle stick signals.) Say you get a gap down trade most of the day at or near the bottom and then the MM runs it up late , you can wind up seeing a big nice white engulfing day when in fact it was a down day, except for some MM jacking with it at the end of the day. So candle sticks have to be confirmed with an interday or at least an hourly chart over say 10 days. Same with money flow. I've been working at trying to develop signals for some time, and I have to discard many more ideas than I keep, and the ones I keep can also change. It's an ongoing and unending process as far as I can see. I'm always putting a new pot on the back burner of the stove, sometimes I get so many ideas I run out of burners <G> However most anything you get that works on convergence / divergence is usable if you keep the ratio , or percentages dynamic. I'm trying to say you can't just find some arbitrary percentage or fixed point were over 1 is bullish , and under 1 is bearish, to picture relative motion is the key for me. As the market dynamics are always in flux, and relative motion is the only way I've found to adjust for taht.. By now I should have you really confused. <G> I take a lot of old sayings and extrapolate on them, such as don't fight the interest rates..well as we can see sometimes stocks decouple from bonds and then recouple, back and forth when they are looking for a new comfort zone. So the yield stocks will live with is always changing, and you almost always need to update your picture. If things are cooking good people buy both bonds and stocks, if they start selling bonds to buy stocks , or stocks to buy bonds it's a tip off that the market is uncertain, and may indicate that not a lot of money is coming into the market, & the funds are fighting to enhance performance by dancing back and forth. The idea of a head / tail thing , liquid vs the not so liquid I developed from reading Value Line, and extrapolated on it. Over and over in Value Line, they say that in down markets the BLUE CHIPS hold up better than their smaller counter parts, so it should work both ways and that leads to in up markets the smaller ones will gain faster or at least close the gap on Blue Chips relatively speaking. And I found that is the case. People can argue that the small caps have languished and indeed they have, ( mostly due to so many new index funds chasing the ones that move the S&P index the most , Big Caps ) however relative motion shows the convergence / divergence effect is still in place. So it's not a fixed thingy but in the relative "rate of change" between the two that signals the market trend. This can get more confusing if I go on, but before I drop it I might add each class has it's own mean rate of change were the small caps may not run up as fast as the big ones, it can get down to, are they running faster than their own mean rate..as compared to how the others are running against their own mean rate. Damm lot of work for market timing. All in all playing the Dow dogs, or the magic ten will out do most indexes, and if one can add timing to it, going cash on corrections and back in for the run ups they can enhance that. I've tried the shorting thingy and while that might work for some, ( and I can make it work some for me ) but it's too distracting and with only so many hours in the day, when I try both I lose enough focus on my indicators taht I start getting sloppy, any way I worry to much when on the short side. Jim