Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Tech Stock Options -- Ignore unavailable to you. Want to Upgrade?

To: Saulamanca who wrote (49000)	8/2/1998 7:42:00 AM
From: donald sew	Read Replies (1) \| Respond to of 58727

Jim, >>>>>>>>>> It is not unusual for the market to hit new highs without the A/D line confirming and that alone is not enough to think a top is being put in. What makes it different this time is from August/95 to March/98 both the A/D line and the market were moving together as one and in March the A/D line starts to break down and fails to make new highs as the NYSE makes new highs in July. It is this de-coupling that makes this divergence significant. decisionpoint.com <<<<<<<<<<< Since you took the ADVANCE/DECLINE analysis one step further, I have also noticed that in a BULL market when the A/D diverges over an extended period of time the market corrects at least 10%. Divergences are basicly only normal in bearish markets (extended flat periods after a strong decline). I am not trying to use this discussion to support the probability of a bear market, but to say that that the probability of at least getting close to 10% correction in the DOW/NYSE is quite strong. For the time being I am calling for a test of the 8570 support which would represent only a 8.3% decline. Now if we break it, and the probability of that happening is increasing, then it should get alot worse. Getting back to the divergence in the A/D line - many probably think that we just started the divergence since the media only recently starting discussing it. Actually the divergence started in the 1st week of April, so the A/D line has really diverged for 4 months now. I would consider that an extended period of time. Seeya