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Strategies & Market Trends : A.I.M Users Group Bulletin Board -- Ignore unavailable to you. Want to Upgrade?

To: steve in socal who wrote (5521)	9/2/1998 11:11:00 AM
From: JZGalt	Respond to of 18928

Steve, I guess I should show you the data that I use to look at the market. In the analysis I use, this just looks at rapidly increasing "p/e + inflation" numbers to try to figure out if we are in "dangerous" territory. The analysis looks back to the mid 1960's when the S&P500 was created. I think you can see some of the trends. The first two columns are the date, the next column is the S&P average and the last column is the "buy" or "sell" signal. Oct 1970 84.37 B Nov 1970 84.28 B Dec 1970 90.05 S Jan 1971 93.49 S Feb 1971 97.11 S Mar 1971 99.60 S Apr 1971 103.04 S May 1971 101.64 S Jun 1971 99.72 B Jul 1971 99.00 B Apr 1972 108.81 <= subsequent high next 12 months. Sep 1979 108.60 B Oct 1979 104.47 B Nov 1979 103.66 B Dec 1979 107.78 S Jan 1980 110.87 S Feb 1980 115.34 S Mar 1980 104.68 S Apr 1980 102.97 S May 1980 107.69 S Jun 1980 114.55 S Jul 1980 119.83 B Aug 1980 123.50 B Nov 1980 135.65 <- subsequent high within 12 months Nov 1986 245.08 B Dec 1986 248.61 B Jan 1987 264.50 B Feb 1987 280.92 B Mar 1987 292.46 S Apr 1987 289.31 S May 1987 289.12 S Jun 1987 301.37 S Jul 1987 310.09 S Aug 1987 329.35 S Sep 1987 318.66 S Oct 1987 280.15 S Nov 1987 245.00 B Dec 1987 240.96 B Jan 1988 249.18 B Oct 1988 277.40 <- subsequent high within 12 months Nov 1991 391.32 B Dec 1991 379.09 B Jan 1992 419.33 B Feb 1992 411.08 S Mar 1992 404.44 S Apr 1992 401.55 S May 1992 412.53 S Jun 1992 413.47 S Jul 1992 411.77 S Aug 1992 418.87 S Sep 1992 417.08 S Oct 1992 410.47 B Nov 1992 417.58 B Sep 1993 461.34 <- subsequent high within 12 months Apr 1996 655.86 B May 1996 641.63 B Jun 1996 673.31 S Jul 1996 657.44 S Aug 1996 662.49 S Sep 1996 655.68 B Oct 1996 701.46 B Aug 1997 947.14 <- subsequent high within 12 months Dec 1997 983.79 B Jan 1998 975.04 B Feb 1998 1012.46 B Mar 1998 1055.69 B Apr 1998 1122.70 S May 1998 1107.00 S Jun 1998 1113.86 S Jul 1998 1146.42 S Aug 1998 1089.45 S Sep 1998 957.00 S <- Monday If you look closely at the pattern, you will see that buying the market after the first change to "buy" from "sell" doesn't get you much in the way of performance. In fact sometimes, buying the first dip, is worse. This would fit in well with Bruce's analysis of a retest of the bottom sometime and a probable now low being made at that time. I made a mistake the other day when I said this indicator went positive to a "buy" signal. It is still negative. I apologize. ---- Dave PS, I also use an inflation "jump" indicator to predict some of the other major downturns in the market, but that doesn't apply right now.