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

To: Dnorman who wrote (2885)	12/26/1998 5:15:00 PM
From: James F. Hopkins	Read Replies (2) \| Respond to of 99985

Dornman; I'd have to looked that up to be positive of the ratio, but rated them giving like a 1.5 x % = (amount of cap weight they held in the S&P,) and about a 3 for the amount of relative % gains they had against the S&P gains, All that was based on the trend BEFORE the JULY down turn, it went like (stock cap/Totals&Pcap) x 1.5 (stock 3 month gain/total S&P gain) X 3 then add them together, ------------------- NOTE you want to find gains in a up trend before a correction, as they can momentum both ways , then apply that as soon as you have a pull back, ( the last winners will likely be the best runners on the next up turn ) You use a little common sense and don't included any that have had unusual bad news or are in a sector you know is under pressure..like I did not even consider oil stocks of any kind. Tossed out internuts except for csco, that may have hurt it, but made it less risky. ---------------------- No consideration was given to any thing else such as earnings and the knee jerk type of news. of course a quick scan to make sure the CEO hadn't just resigned or was getting replaced, or being arrested , like while I knew MO would make a come back, having a 10 stock limit I stuck with the plan (cap/S&Pcap) x 1.5 ( momentum/S&P momentum ) x 3 then summed, there were a few small runners that hit in the top picks, but I think I put a 30B cap limit not to go below, as I wanted liquid stocks. -------------------- Momentum among the big caps was the key, with some extra consideration added for cap size. And that for an added degree of safety. I had some doubts about how it would work out, but it surprised me to the upside. There is no doubt in my mind now that the market rewards momentum, ( or punishes it if it's the wrong way ). I have a feeling those same stocks could be a good signal for the next down turn as the movement in them is somewhat enhanced both ways. Jim