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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Patrick Slevin who wrote (250)	12/3/1998 9:34:00 PM
From: James Strauss	Read Replies (1) \| Respond to of 99985

McCLELLAN SUMMATION INDEX Patrick: Here is an explanation of the Summation Index... The Summation Index is a long-term indicator which oscillates in relation to a Zero Line. The normal range of movement is between Zero and +2000. Movement below the Zero Line is considered bearish, while movement above +2000 is considered bullish. Historical extremes are approximately +4000 and -2000. The direction of Summation Index movement, up or down, is an indication of whether money is moving in or out of the market. When the Summation Index moves below the Zero Line it is an extremely negative sign for the market and indicates that a long-term down trend is in progress and is likely to become more severe; however, it is also likely that a significant market bottom is a few weeks or months away. Once the Summation Index drops below the Zero Line, we should anticipate a bottom in the area of -1000 or below. Once that oversold Summation Index bottom has formed, it provides strong evidence that a major market bottom is in place. There are instances where Summation Index oversold bottoms have formed and were followed by continued selling in the market and lower Summation Index lows, so you should look at our historical charts, which track this index back to 1926, to get an idea of its various configurations. decisionpoint.com Jim

To: Patrick Slevin who wrote (250)	12/3/1998 9:38:00 PM
From: bobby beara	Read Replies (1) \| Respond to of 99985

PS, sorry if I intrude, but the summation index does not always turn at market tops (but it could), it gives advance warning. In powerful uptrends the general market tops in advance of the high flyers that dominate the weighed averages. Usually the secondary lower top in the summation in combination with a higher top in the averages creates the divergence for a major sell-off. Such as what happenend at the July top. bb