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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: J.T. who wrote (25120)	4/9/1999 6:05:00 AM
From: IQBAL LATIF	Read Replies (1) \| Respond to of 50167

JT--<<As you can obviously see, RUT is now at a perfect textbook head and shoulders top. It needs to get through 402 and 406 for 2 consecutive days immediately. Any break in here could be cancerous to health of Nifty Fifty. I view this as now imperitively important as BKX...>> I would share your concern on RUT, however the way BKX has come up from 855 day before yesterday and if we have a second close in this vicinity, we will see a lot of buying in C and MER JPM AMEX CMB. This sector has benfitted from the three rate cuts and has also see the recovery of its bad debts in ASEA, moreover one cannot avoid to miss the LTCM debacle, this BKX sector seems to have recovered some of the lost glory and most probably will pick to reverse some provisions. Most probably going forward after a very solid basing period with no preannouncements, I would tend to think that my levels will be taken out. RUT as a 'psycholgical' barometer has lot of importanve for me, I want this 20 days MA on RUT above that not below the 50 days, as you have very rightly pointed out this needs a close above 404 solid twice, but I think market is right now too focussed on nifty fifty and its potential earnings surprises. Now look at this leading indicaotrs report and imagine if this economy is so strong what can happen to corporate porfits.. Look at the three months average for leading indicators, this huge leap up speaks a lot about what can happen to corporate profits.. The last time we hadsuch a spike seewhat happened to the market. Moderate Increase. Trend Continues To Improve.. April 6, 1999 firstunion.com The Index of 10 Leading Indicators rose 0.2% in February vs. January. The increase was less than half of the strong 0.5% mo/mo jump in January, but as the top chart shows, the 3 month annual rate has accelerated sharply. At 3.7%, it is the highest 3 month annual rate since mid-1996. Does this trend mean the economy is also about to accelerate? We doubt it. The sharp slowdown in that 3 month moving average in the middle of 1998 proved misleading. The manufacturing slump and the stock market plunge that drove the index down were not enough to hurt the overall economy. Similarly, it is likely that this acceleration is more reflective of a rebound in the manufacturing sector than it is of a further boost to overall economic activity. With real GDP having surged almost 5% in the second half of 1998 and by 3%+ in the 1Q of 1999, it is hard to imagine where the firepower for even higher GDP growth would come from. Only 4 of the 10 leading indicators increased vs 9 of the 10 in January. Initial unemployment claims, consumer expectations, money supply, and a wider yield curve were the gainers (in that order). The Coincident Indicators rose 0.3% mo/mo in February, with each of the 3 available components, new jobs, industrial production, and personal income (excluding transfer payments), in positive territory. The 4th item, total business sales, is not yet available. The middle chart shows the trend of the coincident index, which usually tracks real GDP very well. In 1998, it did not. It slowed moderately to 3.2% growth, while real GDP accelerated. Most likely, the benefits of plunging gasoline prices and mortgage rates combined with new stock market wealth account for the difference. The Lagging Indicators rose 0.2%, which allowed the ratio of Coincident-to-Lagging indicators to rise a bit, after having slipped a bit in January. << Please help me with this concern: If RUT fails to follow through in market advancement, can this bad apple spoil the whole bunch? Also, we have had about 17+ straight days new lows have topped new daily highs. At what point does this permeate run for roses? Lastly, 5-day TRIN closed below.75 (overbought) and this reading is higher than July 17. Do you use this tool in your model? Any surprises in PPI in store?>> RUT is doing fine, as I have explained above. I think like BKX it will break upwards once this bond and earnings confirm the findings I have highlighted above but I agree that a break of 388 and 855 is dangerous. I do see NHNL as an indicator but it has been like this for quite sometime, imagine when a market rends higher disproportoinately as distribution is uneven you can see this NHNL, why don't you do one thing, mutiply this new highs and new lows with the price and compare the money going in new highs and new lows, you will find some interesting results, the $ volume going in new highs far outstrips the $ volume of new lows, check it out to see that if this assumption is correct. Global trade is now brandised completely, it is the MSFT's IBM's and CSCO's SNE's ALA's EMC's of the world which has captured hugeshare of revenues, so would they catch the huge share of market cap too, it is winner takes it all. JT .. Ike Keep asking ..your questions open new vistas..