Tuesday, October 19, 2004

October - the bottoming month

The McClellan Oscillator bounced up off its -50 platform to -21, while the ratio-adjusted Summation is coming off its Overbought +750 area to +783 (down from 960). Last week was the first negative Advance/Decline for the NYSE since Aug.6. One Bullish Indicator is the Nasdaq Volume to NYSE which slid under 100% to 99 last week - for the first time since the May '04 bottom which followed the sharp April decline. Also indicating a bottom is the ISE put/call ratio at a 2 month high of 158 (not extreme, however) after signalling the August 6 low of 9815 DJIA. The CBOE Equity p/c ratio is also the highest since Aug. at 79.
According to a mailer from Welles Wilder of RSI, etc. fame, per his Delta Phenomenon, the current bottom will not be put in until Dec. 15 of this year, followed by a large year-end rally into an April 15 top, then the huge decline into November 16 of '05. This is his "hidden order" of the market for the reliable 4-year cycle, which sells for $35,000 and includes shorter term turning data points.

With record numbers of dollars coming out of Money Market Funds, mostly into the crowded trade of short term bonds, anyone who has a minimal knowledge of covered call options and/or an interest in hedging stock market exposure might want to check out: brentleonard.com for an alternative strategy that is low-risk as well as highly rewarding. For those of you wanting more details and actual trading results, a new book is available for $14.95 at Amazon.com: Zero (IN)Tolerance

Subscribe in a reader


No comments:

Post a Comment