Das altze Thema = Indikatoren mT

verfasst von Toro, 08.10.2000, 17:58

Zu finden unter: http://www.gold-eagle.com/gold_digest_00/droke100500.html

bin heute zufällig auf Indikatorenbeschreibung gestoßen, die meine Argumente unterstützt.
Die wichtigste Aussage=>nahendes Zyklusende

October Massacre Approaches

The termination of the 18-year-old equities bull market that
we predicted for the September-October time frame is
coming to pass. We have warned you since January that
this fall would witness the most severe and cataclysmic
stock market collapse since 1929, if not greater. That
scenario is about to be realized. The fatal plunge should
commence within two weeks of the time of this writing and
will continue—with intermittent reactions—into November.
Indeed, it will be most interesting to see if another of our
earlier predictions will come to pass, namely that the U.S.
presidential elections will be suspended when things get
out of hand.

Nearly every technical indicator is sending an unavoidable premonitory
warning to stay away from the stock market right now. The erosion in the
current market from both a price and a volume perspective is nothing less
than atrocious. While certain sure-fire short selling opportunities do present
themselves, the most prudent posture right now is one of non-committal on
either side of the market.

W.D. Gann, in his classic work, Truth of the Stock Tape, wrote the following
bit of wisdom that we can all profit from:"Remember that wild, active
markets are brought about by feverish manipulation, and that they increase
the imagination, exaggerate your hopes, and take away all sense of reason
and proportion. Therefore, in extreme markets try to keep a cool head.
Remember that all things come to an end, and that a train going 60 miles an
hour will cause a greater smash-up if it leaves the track than one traveling 5
miles an hour. Therefore, in a wild runaway market, jump before she bumps,
for you will never be able to get out once the crash comes. When everybody
wants to sell, and non one wants to buy, profits run into losses fast."

The internal indicators represent the essential propelling forces behind the
tape itself. Consider the all-important cumulative volume momentum
indicator—our most accurate. This indicator (which we aptly refer to as
VOLMOM) is based on the principle that volume precedes price, and is
constructed by subtracting declining volume from advancing volume on the
NYSE, then making it into a rate of change oscillator. This indicator not only
shows accumulation versus distribution, but also the momentum behind the
buying and selling patterns on the NYSE. Right now, this indicator has
deteriorated markedly, falling to a multi-month low by late last week. This
indicates an inordinate amount of selling pressure on the exchanges. The
5-day VOLMOM has bounced higher, indicating immediate-term buying
strength. However, the far more important 21-day VOLMOM, a measure of
the intermediate-term trend, shows extreme weakness, having collapsed to
a one-year low. Clearly, the insiders are unloading like there is no tomorrow.
And if our analysis is correct, there is no tomorrow.

The advance/decline line on both the NYSE and the NASDAQ have also
turned down after rallying impressively into summer. The internal erosion is
even worse when viewed from a rate of change perspective. The NYSE
new high-new low momentum indicator (which we call HIMOM), a reflection
of the incremental strength of the market, has shown its lowest reading in
several months, which reflects the strong selling urge among most
investors. It also shows that the big blue-chip leaders are no longer leading
the market. The HIMOM indicator measures the proverbial"last Indian
standing." Even when distribution is widespread and market breadth is
deteriorating, a high reading in the new highs/new lows index can keep the
market afloat for some time. But when HIMOM starts to erode, the market
has lost its last pillar of strength.

Take a look at the chart pattern of the NASDAQ 100 tracking stock, the
QQQ. As prices have tried consistently to rally, each top has failed to reach
the high set last winter. A fanline retracement, which involves drawing three
successive lines on the chart with the top as a reference point, has acted to
contain prices with the QQQ failing to penetrate the third fanline. Unless this
fanline is penetrated, indicating that the bulk of the overhanging supply has
been absorbed, there can be no continuation of the uptrend in the
NASDAQ.

Notice also how trading volume has tended to taper off since the all-time
high earlier this year. This same volume pattern can be seen in a number of
actively traded stocks on both the NASDAQ and the NYSE alike. Each rally
attempt has occurred on successively lower volume. This diminishing
tendency in trading volume is a sign that the bull market is fast losing its
legs.

It is true that the NASDAQ rallied nearly 200 points off its session lows last
week on very high volume. Yet even this strong rally attempt could not close
the NASDAQ above the previous day's close, and while the volume was
high it did not match the volume extremes seen at other NASDAQ turning
points in recent years (notably October 1998). And most of this volume was
selling volume.

Interestingly, the mid-point of this parabola occurs at the last Kitchin Cycle
(a.k.a., Business Cycle) bottom of 1994. This 3-4 year cycle, from which the
3-4 month cycle is a derivative, is due to bottom next early next year, yet
another reason we believe the markets will be crashing into 2001. We have
preached all year our belief that the markets would crash in either
September or October, and it would appear this prediction is coming to
pass. However, if there is one thing we have learned in recent years it is
that anything can happen in a market environment in which so much is at
stake. Literally, the entire future course of the nation is riding on the back of
this market, so it would be foolish to assume the manipulators will simply
stand aside and watch it crash. Assuredly, every effort will be made by them
to keep this market afloat until the last possible minute when the long-wave
economic cycles take over and steal the show.

From a short-term level, the chart of the NASDAQ tracking stock—the
QQQ—shows a parabolic bowl formation, along with an intermediate-term
upward trendline. The bowl allows for a low near the 87-88 area, while the
trendline will support a decline to 84-85. It appears that this supporting floor
will be soon broken.

The most critically important of the NASDAQ stocks, as we continue to point
out, is Cisco Systems (CSCO), also the most actively traded and one of the
most highly capitalized of the tech stocks. The new"old" saying is:"What
good for Cisco is good for the NASDAQ," a sentiment with which we concur.
If this market is to have an opportunity of advancing, Cisco must lead the
way. We have already seen evidence that Cisco is enjoying institutional
support right now, as every time its critical support zone is tested, heavy
buying volume comes in to prevent a Cisco sell-off. However, Cisco is
testing the outer rim of its parabolic bowl formation, and it makes us very
nervous to note how trading volume picks up whenever this rim is touched,
yet Cisco's price does not jump significantly. This is not the typical behavior
of a stock firmly entrenched in a bull market. We make no judgments as to
whether Cisco is about to undergo a major sell-off, but the fact that volume
increases whenever the side of the bowl is met indicates we have correctly
drawn the parameters of the bowl. A strongly"juiced" bowl should act as an
electrical charger to boost prices considerably higher whenever the rim is
touched. When this doesn't happen it is a sign that upside momentum is
waning. It will take a tremendous amount of buying volume to push Cisco
higher.

From a Dow Theory perspective, the Dow Jones Transportation Average is
showing signs of weakness by failing to hold above its supporting floor of
2600. This important area has tended to mark the precise bottom of the 3-4
month cycle in the Transports for the past year. Last week did in fact
witness a conspicuous spike in trading volume just as the Transports were
approaching 2600 (volume, it will be remembered, always precedes price).
We assumed that this volume spike would mark the bottom of
itsintermediate cycle, yet the Transports have failed to rally after penetrating
this level. A basic tenet of Dow Theory is that the Transports lead the Dow
since the transportation sector is the backbone of industry and a critical
component to our nation's financial health. The Transports subsequently
failed to clear 2600; in fact, the index has fallen off sharply since then. This
does not bode well for the U.S. business outlook.

Ford Motor Co. (F:NYSE) is the stock to watch on the NYSE transportation
list It displays a massive contracting triangle pattern on its chart and it
appears on the verge of a breakout, in one direction or the other. A
breakdown through the supporting floor of $23 would be bearish. Ford could
well be the stock that determines the fate of the Dow Jones Transports, and
by extension, the U.S. industrial sector.

From a longer-term perspective, the U.S. economic outlook is bearish. The
clearest proof of this is the chart showing the rate of change in the U.S.
monetary base. The chart highlights the momentum of this long-term
economic measure. The chart for the monetary base, as you can plainly
see, is outright crashing and has just fallen to its lowest point (from a rate of
change perspective) since 1981—the last time this country witnessed a
serious recession. While the monetary base, which measures the amount of
currency and coinage in circulation along with deposits at Federal Reserve
banks, is not as important a measure as the M3 money supply itself, it
nonetheless underscores a developing trend that few are cognizant of,
namely, that deflation—and not inflation—is the underlying predominant
force in the physical economy (notwithstanding pockets of inflation in the
consumer markets). When the markets collapse under the weight of
converging cycles of varying timeframes this month, it will leave huge
collateral gaps due to the enormous debt that now exists. Since this debt
must ultimately be serviced, the demand for money—once the dust finally
settles—will be immense. With little physical money left in the economic
system (as measured by the monetary base) one can only imagine what the
consequences will be.

Our long-term investment stance remains unchanged: maintain heavy
reserves of cash, along with an adequate hedge of precious metals. Safety
should be our biggest priority. Positions may now be taken in the Rydex
Ursa or Tempest Funds (the latter is 200 percent leveraged against the
S&P 500 and provides a far greater potential for return than Ursa). Get
ready for the biggest financial crash since 1929, a crash that will usher in a
crisis of millennial proportions.



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gesamter Thread:

• Das altze Thema = Indikatoren mT - Toro, 08.10.2000, 17:58
  • Re: Milleniums-Crash, au weia... - Lullaby, 08.10.2000, 18:19
    • Wohl ironisch gemeint, was? mkT - Toro, 08.10.2000, 20:50