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

To: Jack Park who wrote (5563)	9/7/1998 5:24:00 PM
From: Julius Wong	Read Replies (1) \| Respond to of 18928

Jack: Many investment strategies are based on 'Buy Low, Sell High'. The key is in knowing what is low and what is high. There are two common methods in determining low-and-high: prediction based on historical data, and trend following. Both methods are not perfect. For sector funds I like to use the number of strong funds as an indicator. This is a trend following method. If 85% of funds are strong then we are near the market top, time to move money to cash, in steps. If only 15% of funds are strong, also move to cash. Wait for oversold or bottom out to buy. "Oversold' and 'bottom out' are subjective, and may be right about 50% of the time. The real bottom may be 20% or 40% lower. What is a strong fund? The definition of strong is not too critical. If I change the definition of 'strong,' the threshold % only change a small amount. The financial funds are oversold (in my opinion) now, good buys are FSLBX, FSVLX, FSRBX, and FIDSX. Julius