TWO GOOD INDICATORS WORTH WATCHING PLUS MORE ON SEASONALS

verfasst von leibovitz, 10.12.2001, 13:30

There are a number of good indicators with a history going back into the mid-1980s that have continued to give a series of good indications. Both were cited by us as being
correctly bullish near the recent lows, and so I felt an update was advisable.
On September 17, 2001 my Hotline featured our indicator which uses VIX, the volatility of options based on the S&P 100 Index, noting that the market was finally getting up
to a high volatility reading which put it in position to flash a buy signal. I then noted"15 of the prior 16 buy signals were profitable." On our updated chart, S0235 (below left),
one can see that VIX has now fallen sharply to the low volatility region and that puts it in position to flash a sell signal, but it has not done so yet. Nevertheless, it does suggest
some near-term caution.
The other indicator (S926) updated and shown below right, was featured on my May 23, 2001 Hotline as having moved into its unfavorable zone, but then on a Chart of the
Day on October 15 th and my Hotline of November 7 th, I again featured this chart as being very hopeful. This indicator continues to improve as it shows that money market mutual
funds have exploded at a 43.7% annual rate over the last 13 weeks. This suggests that any caution being given by our VIX indicator is likely only to refer to the short-term with
more rally later in December and into January.
All of this fits into the December seasonal pattern. Over the last 73 years, using the S&P 500, the first five trading days have been up 66% of the time rising, on average,
0.6%, the next eight sessions have been up just 44% of the time losing 0.4%, on average, and the rest of the month has risen 85% of the time and 1.4%, on average. --Ned www.ndr.com

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• TWO GOOD INDICATORS WORTH WATCHING PLUS MORE ON SEASONALS - leibovitz, 10.12.2001, 13:30