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Strategies & Market Trends : Point and Figure Charting -- Ignore unavailable to you. Want to Upgrade?

To: Jorj X Mckie who wrote (14505)	2/22/1999 11:59:00 PM
From: Ms. X	Respond to of 34811

I'll answer for Tommy. The NYSE BP reversed up on September 17th, 1998 at 22%. One week prior too, the 10week still hadn't reversed up - but had by Sep 17th (don't know the date). The Optional BP was in a column of X's at that time. Here is his comments on ,b>September 17th, 1998. Important to remember, the Dow Jones continued to decline until October 8th but the broader market was gaining strength. SUMMARY: UPSIDE REVERSAL IN THE BULLISH PERCENT !!! This week the NYSE Bullish Percent reversed up into a column of X's, putting the offensive team back on the field and with great field position. As we have pointed out in the past, the NYSE Bullish Percent doesn't get below the 30% level very often so the reversal up is certainly positive and it comes from great field position.The reversal up doesn't mean that we abandon our game plan. We received a call this morning from a client who said, "The NYSE Bullish Percent has reversed up, does that mean we shoot for the moon now." My answer was NO! You don't go out and just start buying willy-nilly. Even though the NYSE Bullish Percent has reversed up and we have the offensive team on the field again, if you buy stocks which have bad relative strength and awful chart patterns, the probability you are going to make money is still pretty slim. Remember your game plan. That means you stick with those sectors which have reversed up from below 30%. In those sectors you buy stocks that are fundamentally and technically sound. That is, the stocks are showing higher highs and higher lows and exhibiting good relative strength. If the stock is extended, then be patient and wait for a pullback. Again, you must stick to your game plan. A reversal up from below 30% does not mean that the NYSE Bullish Percent will just rally straight up to 70%. Going back to 1974,that has only happened twice in the seven times the NYSE Bullish Percent has gone below 30%. A much more likely scenario for the Bullish Percent is that it will rally up and then pullback. Don't forget the dissertation of the 1981-1982 market we outlined in the September 4th report. During 1981-1982 the NYSE Bullish Percent bottomed at 20% in September 1981. The initial rally up took the Bullish Percent to 46%. It then pulled back to 28% in March 1982 while the Dow Jones Industrial Average moved to a new low. Notice that the Bullish Percent was making a higher low which was a positive divergence. The NYSE BP rallied again to 46% in May of 1982 and then reversed down, though only falling to 32%. The Dow Industrials again went to a new low but once again the Bullish Percent made a higher bottom. It wasn't until the reversal up in August 1982 that the market blasted off. During this 1981-1982 time, the strong stocks were making higher bottoms during each reversal down. Tax loss selling could easily cause a market action like that of 1981-1982. Prepare yourself that is the type of market we will experience. If we do reverse straight up and go to 70% then, great, you'll be pleasantly surprised. But if not, then you will be ready for whatever happens. The bottom line is we have the football again and at great field position. Stick to the game plan of buying strong stocks in sectors which have reversed up from low levels and are both fundamentally and technically sound. Keep stop loss points in place and adhere to those.

To: Jorj X Mckie who wrote (14505)	2/23/1999 12:09:00 AM
From: Ms. X	Read Replies (3) \| Respond to of 34811

I'm printing this from DWA because I think it is very important for everyone to keep their perspective. I know rallies like today drive everyone crazy and the cash burning a hole in your account is enough to send you strait to the loony bin - but remember last year. Here is a recap. ------ Printed from Tonights DWA Market Analysis Report. We will become more of a believer in the short-term rally when the option stock Bullish Percent comes along and reverses up. Yesterday the Dow Industrials gave a triple top buy signal on its 50 by 150 chart and the S&P broke out. However, if you have followed us for years you know we place more emphasis on the NYSE Bullish Percent. The reason for that is simple. The Dow Jones and the S&P 500 can be pushed and pulled by a few stocks and has nothing to do with the broad market. We are much more concerned with the broad market as this is where most investors live, not in a handful of Dow Jones stocks. We realize that perception is everything to the individual investor and your phone is ringing off the hook to go long. It also rang off the hook to go long on the new high in July 1998 when the NYSE Bullish Percent was unable to even reverse to the upside. If you tempered their enthusiasm then, they should have thanked you. While we are talking about 1998, let's look at the action in the summer of 1998. Remember the Dow Jones, S&P 500, the New York Composite and the Nasdaq Composite all went to new all-time highs in July. On June 23rd, the short-term indicators reversed up and the Dow Jones was at 8820. We said as we always do "go long the market as the short term often turns into the long term". We advised you to use stops, stops which were actually placed on the specialist's books as mental stocks do not often get executed. The stops would automatically take you out if you needed to be out. If the NYSE Bullish Percent reversed to the upside, we would take off the stops and think longer term. The Dow Jones subsequently went to 9338, making a new high, and collapsed from there. The Bullish Percent never reversed into a column of X's. The stops on those short-term trades were elected at probably higher prices (you raise stops whenever possible and trail the stock up) and you were put back into cash at the right time. During that time the A-D line never gave a buy signal exceeding a previous top until September 1998. There are a lot of similarities but we aren't predicting. This is 1999, not 1998. The same plan exists. When the short-term indicators reverse up, we will go long the market with stops. It's that simple. Maybe it will be this Wednesday, maybe not.