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 : Point and Figure Charting -- Ignore unavailable to you. Want to Upgrade?

To: Dennis J. who wrote (7405)	9/19/1998 9:58:00 PM
From: Smooth Drive	Read Replies (4) \| Respond to of 34809

Hi Dennis, >>So cash is king? That's the way I feel. Hang back, and wait for a really obvious play to appear, really obvious to others too. Then go contrary with deep in-the-money options. Grab your seat-belt and hold on tight. Dramamine anyone?<< No Dennis, I'm not hanging back. I don't think it's time to be on the sidelines in the stock market. As distasteful as the football analogy is to me (yes I played, but 99% of the women I talk with and use this analogy look at me in that you know what kind of way) I'm now on the field and the smell and feel is everything I remember it to be. We got the ball bucko and I'm driving for 6. How in the world could I not follow the New York Stock Exchange Bullish Percent Index (NYSEBP)? You will recall this: Message 4829076 Well, the NYSEBP reversed to Bull Alert on the 15th so that little test is over. Here's how it ended: INDEX---5/13/98------9/15/98-----Gain/(Loss) DOW-----9211.84-----8024.39-----(12.89%) S&P------1118.86-----1037.68-----(7.26%) NAZ------1866.18-----1678.11----(10.08%) Now you tell me. Did the NYSEBP help me or hurt me? And, these are just the indexes. Depending on your source, 80 to 90% of all the money mangers don't outperform the S&P. I've read that the average portfolio is down 20 to 30%. My money has been earning money market interest and it's itching to go. You know Dennis, when it reversed on Tuesday, I heard some initial jubilation and then quite. Deathly quite. There sure are a lot of so called P&Fers running from our king of leading indicators. "Ill wait for confirmation." From what? "Mr. X says this or Ms. Y says that -------". You said "Really obvious to others too." At that point Dennis, it's no longer a leading indicator, it's a lagging indicator. The whole point of the NYSEBP is to be contrary. Bearish at the top and bullish at the bottom. To be contrary to the prevailing sentiment is difficult. My experience with the stock market is that contrary wins more than running with the crowd at all times. You gotta be born again and willing to take what the king says. I think a lot of folks are afraid of being wrong or following a false --------- indicator. Afraid you might be wrong? Nonsense! The NYSEBP is never wrong. It can't be wrong because it tells you just exactly what the market is doing via a large group of P&F charts. It's one of the few things in life that will never lie or cheat or send false signals. It calls a spade a spade, and yells that the emperor is without clothes. The easiest thing in the world is to teach someone the simple buy and sell signal on a P&F chart. That information, the simple buy and sell signals, are what create the bullish percent charts. It takes a 6% move in the opposite direction to change a bullish % index risk level. That's big stuff. Think about the big market run in July and the fact that the NYSEBP didn't change. It has now. Just when everyone is saying we are in the bear's den. The NYSEBP says "Somebody's buying stocks and they made enough new buy signals to reverse this chart that's been going down since May 13th." If one considers him/her a P&Fer, and they haven't entered buy stop orders on strong P&F charts, then they ain't. "Yea, but what if the NYSEBP reverses down?" Then it reverses down and I'll deal with that. It just tells me what is and in a perfect leading indicator fashion. It might go back down and it might go through the damn roof. There is no Holy Grail. There is no Holy Grail. There is no Holy Grail. The closest you will every come to a stock market Holy Grail is a P&F chart and the bullish % indexes those charts create. Know yourself and the action you will take or not take for each risk level. To not sit down and memorialize the actions you will take at certain NYSEBP risk levels is to be doomed to the lost sheep bin asking everyone their opinion on what to do. And I believe that 99% don't know chicken manure from apple butter. I'd sooner follow a blind duck across a busy highway than listen to some of the crackpots pontificating market direction. Hell I bet most of them can't find the toilet paper roll without a big arrow pointing to it. Open Tom's book to page 92 and 93. How many times has the NYSEBP reversed from 16? Look what it did. What action would you have taken in each of these situations? Was it ever false? Nope. It just told us the truth. No black box here. We know exactly how it's created. In RV Davis' 1965 Profit and Probability, he employed a simple mechanical system of buying, selling and shorting the market using two stocks from 1914 through 1964 and 1100 stocks representing all industrial groups from 1954 to 1964. Buy Dr. Zeig's book and study the results as well as Zeig's additional testing results. Show me another pure mechanical system that performs like this. Now add trend lines, RS, bullish % indexes etc, etc. These charts create the NYSEBP that just said "get on the field". Remember the story about the driller? Goes like this: A gentlemen from Houston showed up at St. Peter's desk one day and St. Peter looked through his PC and said "You've led a good life, and you were a contributor to the Baptist church and in those ways you are eligible for entrance into heaven. But unfortunately, we are full right now on our quota of oilman and God has decreed that no more oilmen will be allowed into heaven for the time being." The gentlemen from Houston thought about it for a minute and came back and said, "If I create a vacancy, can I come into heaven?" And St. Peter said, "I guess, it's highly irregular, but if you can create a vacancy, you can come in." The gentlemen smiled, cupped his hands to his mouth and said, "Oil discovered in Hell." And it didn't take more then 2 minutes before all these people came running out, hats flying off, coats flapping, running down the steps, running across the lawn and getting on the escalator. St. Peter smiled and said "It was damnedest thing he'd ever seen, but a deal's a deal." And the gentlemen from Houston walked up the steps with a big smile on his face. Got half way up and stopped. Turned around and started going across the lobby, and St. Peter said, "Where are you going?" And the guy said, "You never know, it could be true." There's a lot of people yelling bear or bull with a system that Rube Goldberg would be proud of. They can't or won't explain it in any detail but you know "It could be true." When the NYSEBP yells "Oil" I run. Everything else is the stuff we occasionally get on the bottom of our shoe. Take care, Eric