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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: EepOpp who wrote (33322)	11/9/1998 5:38:00 AM
From: 246810	Respond to of 94695

MY OPINION TO ALL Market p/e ratio is a function of expected earnings. As long as confidence remains high (logically or foolishly), p/e can stay high. 1965 through 1983 is a period where the dji remained level as earnings caught up to reduced confidence. October 15th is a very interesting chapter from "Alan Greenspan watching the channel lines 101." Not only did the rate cut force the index out of the descending channel, but it pulled a lot of options into the money. The index could just have well bounced down off the top channel except for the heavy handed government intervention. Now the dji index it is cruising along under the top channel line of a 2 ½ month rally. The probability of the index retreating from about 9000 to about 7800 is very high. 246810

To: EepOpp who wrote (33322)	11/9/1998 7:54:00 AM
From: donald sew	Respond to of 94695

Will, >>>>>>>>> is it possible for technicals to be so far in the extreme that they actually become a confirmation signal? i ask because isn't it possible to a market to be overbought/oversold for quite sometime and continue to move up/down? <<<<<<<<<< If you recheck my previous post, I mentioned that my short-term technicals are severely overbought. I try to mention as much as possible, but didnt this time, that short-term is 1-5 days. My mid/longer-term analysis (30+ days) is just approaching overbought, and has a little more upside. I am mainly a short-term option player, so it is important to make the proper time reference. My short-term technical breakout/breakdown is a common occurance and averages about 3-5 times per year, and they do imply that the next short-term (1-5 day) cycle should be up or at least form a double top. However, they can also stop on the dime and revers downwards at anytime. I have noticed that after these short-term technical breakouts there is only a 50/50 chance of further movement upwards, since I have noticed that there are about the same amount of occurance where such has led to a more significant pullback on the next short-term cycle - so its a flip of the coin and no real confirmation of anything. Its a different story with my mid/longer-term analysis. In the last 5 years(did not have data going back further), only once did my mid-term analysis technically breakout and that started around June this year, which led/continued the strong upswing in JULY before the big selloff. So a technical breakout in my mid/longer-term analysis could be a confirmation of a bubble about to burst, but on a statistical basis it is not acceptable since I only saw that happen once since my data is limited to 5 years. On the other hand it has no confirmation that the market will continue up. Seeya