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

To: donald sew who wrote (53485)	9/22/1998 9:00:00 AM
From: Jay Scott	Read Replies (1) \| Respond to of 58727

Thread, Active-investor added 3 tech buys today... Thought you might want to check out the options on CSCO, PSQL, and MGXI. Just added at active-investor.com. DON: The 6% reversal on the charts may be in relation to what Dorsey calls the Bullish Percent charts. For each index, they keep a running tab of what percentage of stocks in that index are on buy signals. That gives you a number from 0-100%, with most sectors spending the majority of the time between 30-70%. The present trend is very bullish for the NYSE stocks, but if 6% of the buys go to sell signals, that trend will reverse downward. If this is a market like 1987, 90, or 94, we are not likely to see 7400 again anytime soon. The short-term and long-term indicators are very washed out and have reversed up. If this market is like 1981-82, we WILL see the market move up over the next couple of months, top out, and retest those lows. One thing that does not bode well for a continued rally is, of course, seasonal factors. How many October-Novembers have been great periods? JS

To: donald sew who wrote (53485)	9/22/1998 4:10:00 PM
From: Jorj X Mckie	Read Replies (1) \| Respond to of 58727

Hello Donald, Unfortunately you have only seen part of P&F story and therefore, perhaps a misconception about what the signals may mean. 1. The indicator that reversed up last week was the NYSE Bullish Percent. It is based on the number of stocks (using a pool of 5000+ from NYSE and NAZ) that have either given a P&F "BUY" or "SELL" signal. So that 6% that you mention has nothing to do with the DJIA directly and everything to do with the percentage of stocks that are giving buy and sell signals. 2. The reversal up of the NYSE BP means that the general market direction is expected to be positive. This does not preclude down days or corrections within the overall expected uptrend. 3. To reverse the NYSE BP it would be necessary for a 6% change in the number stocks that are giving new sell signals (note it must be a new sell signal). 4. A reversal of the DJIA would not necessarily change the NYSE BP direction. However the specific reversal that you mentioned would give a very clear sell signal on the DJIA components. As a matter of fact, the P&F chart for the DJIA very closely mirrors your support and resistance levels. Again, the NYSE BP is a general forward looking indicator. It indicates to take a general bullish stance (implying that the bottom has been found). It doesn't mean that individual stocks or sectors won't have their down days. Tom EDIT: I am not the most experienced P&F person, so I may have a minor mistake or two in this message. However, the main message is accurate.