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

To: pater tenebrarum who wrote (11851)	4/23/1999 9:31:00 AM
From: donald sew	Read Replies (1) \| Respond to of 99985

Heinz, When I checked the PUT:CALL ratio chart, I also noticed that there were no strong sell offs when the P:C ratio on the OEX was so high. Per what you have previously indicated, what is probably needed for a strong selloff is for that ratio to drop, but that would probably only occur if the market surges srongly to the upside to dry out the PUTs. Is it possible that this indicator is giving a mis-signal? Lots of other indicators are saying we are near the top but this is one of the few which is saying that we could go much higher. I am getting the impression that each time we have some sort of pullback the OEX PUTs increase, which is normal. But as the market is rebounding the volume in the OEX PUTs do not decrease but either remains the same or continue to increase. Is it possible that we may be seeing an anomoly in the making. With my analysis, I want it to be as dynamic as possible, so I normally do not stay with absolute numbers, but rather gear my analysis to the rate of change. Lets look at the OEX PUT:CALL ratio - it is normal when the market bounces up for the OEX PUT:CALL ratio to decrease. If that is the case, then right now we could make the conclusion that the rate the OEX P:C ratio is improving is changing, or say it this way: that the rate of change in the OEX P:C ratio is abnormal. Heres my point. I have seen anomolies in the various technical indicators in the past. I have also noticed that these abnormality normally produce strong moves in the opposite direction when the abnormality occurs. In this case this abnormality is occuring during an upswing so per my thesis the result could be a strong move to the downside. Actually, this is part of my GUITAR THEORY for forcasting the market. Would like to hear your comments. seeya