Daily Market Commentary

Commentary Jan - June 2001:

Comments: June 29, 2001

OUT for Monday.  Today's rally fell apart.  The overhanging pessimism is too powerful a force to be easily overturned.  A quick look at the TRIN or ARMS indicator over the past few months shows that it ended most days over 1.0.  This is an indicator that more money is flowing into the down stocks than into the up stocks; which mostly means there is a negative money flow.  Today's action tells me there is little chance for a 4th of July rally this year.  The NASD continued to trade for a extra hour Friday, forcing the S&P into negative territory.  Looks like a weak opening for Monday.

Comments: June 28, 2001

OUT for Friday.  Today's action provided us with more data for "post day" analysis of FED rate hikes and cuts.  In general the street likes to see the FED act, and they don't care whether the interest is raised or lowered.  We now have over two dozen recent FED actions and that will be enough to incorporate into our model.  Today's after the close action (1PM-1:15PM Pacific time) was interesting with a sell off by the futures market.  There is still some overlying pessimism holding the market back. We hope it will dissipate prior to the forth so we can get a real upswing going next week.  Strong, but crossed signals are keeping us out of the market for Friday.  Looks like a draw.

Comments: June 27, 2001

OUT for Thursday.  We saw our sell signal change to an out at the closing bell.  Though there is a slightly greater probability of going lower the magnitude of move favors the up side.  The market will digest today's FED move and make up it's mind after the first hour of trading.  We may see both a drop to the 1208 level and a retest of the 1220 area. 

Comments: June 26, 2001

Reduce SELL exposure to 50% for Wednesday.  Although the signal remains a sell, we are reducing our exposure due to the unknown response to Wednesday's FED action.  Safety is our #1 concern.  The market closed within two points of our expected range today after greater than expected weakness in the morning.  Let's watch.

Comments: June 25, 2001

SELL continues for Tuesday.  The signal has moderated quite a bit from Friday and with the Fed announcement so near on Wednesday, I do not expect to see much more than stocks moving to their closest support levels on the charts.  This may take the form of the Dow moving slightly higher and the NASD slightly lower. The most probably direction for the S&P is somewhat lower, to between 1210 and 1215.  The future's market closed much weaker than the cash but we will have to watch the after market to see if the trend continues.  

Comments: June 22, 2001

SELL for Monday.  Beware, this is a very dangerous situation.  We now have our images pointing down, along with the overriding pessimism adding fuel to the downward direction.  The Probabilities are extremely negative and the amplitudes indicate that we could see 2% or more on the down side Monday.  It may very well be a coincidence, but we see many characteristics similar to that of Friday October 24th 1997.  The following Monday the S&P dropped over 6 1/2 % .  I don't expect that kind of drop, but be alert. 

Comments: June 21, 2001

OUT continues for Friday.  This stealth recovery has slipped beneath our radar.  Although we have all of our images pointing to a "buy" we have an overriding pessimism that is negating the signals.  I would not be surprised by a big up-day tomorrow nor surprised if the market would give back Thursday's gains.  Sorry I can't be of any help today.

Comments: June 20, 2001

OUT for Thursday.  Slightly improved probabilities, but still somewhat negative.  I don't see a breakout here.  Most probable is slightly down.  The range today was a little higher than expected, but not too much.  More watching and waiting for a clear signal.

Comments: June 19, 2001

OUT for Wednesday.  The overall pessimism continues, but we do not have an action signal.  I expect the market will move within a small range tomorrow about +/- 7 points on the S&P.  The good news is, the market did close positive for the day.  If the market should start to head lower in any significant way, you could see it drop another 3 1/2 % over the next week.

Comments: June 18, 2001

OUT for Tuesday.  Our Buy signal failed.  Monday was the seventh straight down day for the NYSE index.  We do not have any definitive direction for tomorrow.  The market still has the overhanging pessimism, but has developed an oversold condition due to the string of down days.  This tends to keep the traders from additional shorting.   Judging from the probabilities and amplitudes the most likely outcome on Tuesday is a small recovery.  With no "emotion" or "money flow" signals we are parked in the money market.

Comments: June 15, 2001

Finally, a BUY for Monday!  A strong but partial recovery after the first half hour today, has built the foundation for an up-move on Monday.  On the positive side we have more pension fund buying and all of our images in positive agreement.  On the negative side is an overhanging pessimism that will probably give way as the market climbs back up.

Comments: June 14, 2001

A full week of SELL signals continues through Friday.   Our signal has moved to a moderate sell from severe.  There will be some pension fund money available to buy tomorrow and we might see an up-move sometime after the opening. The closing figures were weak and the close of the S&P futures subtracted another 6 points off the already lowered index.  But this is a paced down turn, no panic.  Thursday's drop was right on the money in terms of amplitude and because of that we could see it continue for awhile longer.  

Comments: June 13, 2001

Continue to hold the SELL for Thursday.  The longer term negativity is back, together with negative emotional forecasts from all of our images.  The only bright spot was the moderately high closing TRIN  indicator which is indicative of emotional extremes.  But that alone isn't enough to change the bleak outlook.  Some positive money flow should be coming in from the pension funds around the end of the week.  Right now short is best.

Comments: June 12, 2001

SELL once more for Wednesday.  The S&P retreated to the 1235 level that we forecast yesterday, but then it turned around to close slightly higher on the day.  The longer term negativism has been dispelled, but some new emotional challenges to the upside remain.  The NYSE closed down for the day and once again money fled to safer ground.   Our real money managed account has moved to the money market in response to some mixed signals just prior to the close.  We do not have a large enough sample size to give good estimates of the amplitudes and probabilities for Wednesday.  If the market goes beyond the 1265 level it could go much higher.  But the closing figures tell us to expect a continuation of the downward movement for Wednesday.

Comments: June 11, 2001

SELL for Tuesday.  We hit the 1250 level as expected and our signal has become more negative.  Both short and medium term emotional factors are negative and we saw some money leaving the market today for safer ground.  If the market can break below the 1249 level tomorrow, we should see it get to 1235, if not, it will probably retrace today's down move, up to about the 1264 level.  We are expecting the negative momentum to drive it down.

Comments: June 8, 2001

SELL for Monday.  The market once again touched the 1260 level.  I believe the higher probability is for the market to go back to about 1250 before it will test the 1277 level of today's high.  Like yesterday, most of the indicators are flat, so the sell signal is not very strong. 

Comments: June 7, 2001

SELL for Friday.  The market rebounded off a low of about 1265 to close with a 1/2% gain. There was an upward push at the close but I don't buy into it.  Most of the indicators are flat so any economic news can rule.  I expect the market to move toward 1280 but later in the day give back all of today's gains. 

Comments: June 6, 2001

SELL for Thursday.  The pessimism is building and we have a fairly strong sell signal.  The last few minutes of market trading pushed the S&P futures up a couple of points over fair value but I do not expect it to hold.  I am looking for another pass at the 1260 level for Thursday.

Comments: June 5, 2001

OUT for Wednesday.  We have crossed signals for Wednesday.  Our simple emotional models are pointing up, but we have some lingering pessimism that may just come into play tomorrow to end this four day upswing.  We chose the easy way...out.  We expect some contraction in movement tomorrow.

Comments: June 4, 2001

BUY for Tuesday.  We got the small up we were looking for Monday.  Tuesday hopefully will be a bit stronger.  The money flow continues positive with some added emotional components.

Comments: June 1, 2001

OUT for Monday.  Slightly positive readings, but no real strength.  Market is once again crisscrossing the 1260 level on the S&P.  The overall negative bias seems to have dissipated some here and we do have some positive money flow for Monday.  Expect a very small up.

Comments: May 31, 2001

OUT for Friday.  We have short term positive emotion and a positive money flow.  Normally this would be enough for a strong up day.  But the forces are being countered by some longer term pessimism.  Bringing us to an out forecast.  The out signal came in the last few minutes, overturning a buy signal so we will have to exit our positive position at the morning fix of the Rydex funds.

Comments: May 30, 2001

SELL for Thursday.  We would normally be looking for money to enter the market near the end of the month, but we saw money leaving for safer ground near the close today. And that was from a market that was already giving a sell signal.  Both probabilities and amplitudes are very one sided aimed down.  The S&P futures market closed neutral to slightly positive relative to the cash.  There was no special news just after the close.  Downward is safer at this point.

Comments: May 29, 2001

OUT for Wednesday.  We expect the market to pause in its down move with a small change for tomorrow.  The probabilities slightly favor the upside.  I see another test of 11000 on the Dow and the S&P will probably brush against 1260 before the day is over.  

Comments: May 28, 2001

SELL for Tuesday.  The downward trend of the past week should continue into Tuesday.  We would like to have more data to base our probabilities upon, but based on the smaller sample size the probabilities are very negative.  It also looks like the upward trend line was slightly broken on the daily charts which could influence the chartists.   On the positive side the after-market is showing some strength.  We expect the market to go lower after a positive opening.

Comments: May 23, 2001

SELL for Thursday.  Even though the market has a tendency to go up the few days prior to a three day weekend, all of our images say sell.  We saw money leaving the market today to safer lodgings. The mood has been flat to negative for the past two weeks and yet the market has climbed higher. Today the signal turned seriously negative and an additional decline about the same size of today's is reasonable for Thursday.  I will be out of town tomorrow and will miss tomorrow's posting.  I will be able to post on Monday afternoon for Tuesday's market.  Have a good holiday weekend. 

Comments: May 22, 2001

OUT for Wednesday.  Market took an expected pause here and should take another on Wednesday.  The signal is fully neutral today and there is really no significant news to speak of.  We will wait in the money market.

Comments: May 21, 2001

OUT for Tuesday.  Market remains stronger than expected.  Almost a buy signal in terms of signal strength for tomorrow so I don't expect to see a collapse.  But a pause should be coming.  We are now working on a three day model to round out our forecasts.

Comments: May 18, 2001

OUT for Monday. We lost ground this week.  We have an excellent program, but at any particular point in time will have its bad days.  This points out the importance of diversification and a long term philosophy.  Do not put all your assets into any single investment.  If possible, own real estate as well as stocks and utilize a good hedging program that is independent of the economy such as ours.  Today the market opened lower, attempted to rally, drifted lower most of the day and finished on a positive note.  This positive close was not very good for a continued rally.  It was really to small to gain much ground and alerts the traders that after four days up we may be ready for a down day.  Our signal is flat, the average amplitudes are small and even the extremes on the amplitudes only range about +/- one percent.  

Comments: May 17, 2001

OUT signal continues for Friday.  We do not think the market has anything left beyond a test of today's high. The probabilities are slightly negative and the signal strength is as much negative today as it was positive yesterday.  I expect to see the market open lower, go higher to test today's highs then close on a mild negative note.

Comments: May 16, 2001

OUT signal for Thursday.  Although both the probabilities and our signal are somewhat positive, we have an out signal. After an early morning drop, a "mild inflation" report by the Labor Department brought life to a very dead market.  More life than I was expecting. With this last interest cut we should be moving away from the negativity that has surrounded the market for the past year and into a trading range market as investors maintain caution.  I expect to see the market continue up in the morning then drift lower into a holding pattern with a small gain.

Comments: May 15, 2001

Another SELL for Wednesday.  The Fed threw a party and nobody cared.  Just what is going on?  Even with the gyrations at Fed announcement time, the total trading range for the day was less than 1%.  The Fed's 1/2% cut and "continued diligence", was a little more than the market expected,  but the market did not respond.  So where are we now?  Our "sell" signal got a small amount more negative, but not much, and the projected amplitudes are very small.  Expectations will now shift to the new earnings' reports to try to decipher the other half of the equation  "Earnings" / "interest rates" ~= SPindex.  The SP futures market shot upwards about 4 points in the 15 minutes after the cash index closed but I haven't seen any news to justify it.  We think the market will drift lower.

Comments: May 14, 2001

SELL signal continues for Tuesday.  We have insufficient data to enthusiastically  support those very weak probabilities shown on the forecast page.  But we do have enough data to arrive at a "sell" signal.  We will have some pension fund money flow providing a small boost tomorrow, but all eyes are on  Mr. Greenspan who is sure to make a 1/4, or more likely, 1/2% cut in rates at tomorrow's scheduled meeting.  The small rally in the last hour of trading today was not very impressive, all it did was break the five day down streak and dissipate the upside support from the traders looking for a bounce.  The "trin" index has stayed above 1 or very close to it most of this month indicating more volume in the declining issues, or money leaving the market.  The market may rally on a 1/2 point cut, but I don't see much indication that it will carry past that old 1260 level on the S&P.  More likely it will continue to drift lower regardless of the cut size.  Although a 1/4% cut should make the down move more forceful. 

Comments: May 11, 2001

SELL signal for Monday.  This is not an impressive "sell" signal.  The probabilities lean south but the amplitudes are small and the signal comes at the end of a four day down streak.  The traders are probably looking for a tiny bounce up.  Most players are waiting for the Fed to make its move on Tuesday.  The federal fund futures, though still leaning toward a 1/2% rate cut have backed off a bit and now are between 1/4 and 1/2.  Stocks could continue to drift lower as investors prepare for the possibility that the cut may only be 1/4%.  We don't expect to see any real surprises here.

Comments: May 10, 2001

OUT for Friday.    Our  signals still keep us out of the market but the probabilities look  like we will have a small up day.  Perhaps testing the highs of today.  I don't expect a breakthrough.  This is our fourth "out" signal this week.  The market has drifted a bit lower each day but still has hardly moved more than 1/2 % overall.  The futures market closed the last 15 minutes in a very positive manner, which if continued in the aftermarket will indicate a strong opening.

Comments: May 9, 2001

OUT for Thursday.  This directionless market is waiting for something to shake it away from that 1260 level that it has been crossing every day.  I watched some money leave the market for safer ground today, but not with conviction.  Ever so slight leaning to the down side.  I expect the range tomorrow to widen.  Perhaps enough to give us an action signal for Friday.  For now it is safer to stay in the money market once more.

Comments: May 8, 2001

OUT continues for Wednesday.  Another completely flat signal.  The probabilities are now slightly leaning to the upside, but really there is no clear sign of market direction.  All the easier for something to come out of the blue with a surprise to drive the market.. somewhere. We won't go for the ride and will stay in the money market another day. 

Comments: May 7, 2001

OUT signal for Tuesday.  Our Buy signal failed, showing that the market is tired in this area.  We have a slight leaning to the down side in both the probabilities and amplitudes.  Exceptionally flat signals.  All images giving flat "out" signals. Not a real hint of market direction for tomorrow in our numbers.  The closing S&P futures reflect a more negative sentiment since they closed with a negative premium to the cash market.  We will stay in the money market till we see a clear signal. 

Comments: May 4, 2001

BUY for Monday.  The S&P 500 opened down about 16 1/2 points then closed up over 18 for the day.  This turn around in emotions should continue through Monday where we have both the emotional and money flow components working together to support the market.  The market looks over extended on an hourly chart, but the daily chart shows that it has spent some time in each of the last five days at this level.  Perhaps forming a launching pad for another rally.  The probabilities look good for a buy and the comparative amplitudes are excellent.  

Comments: May 3, 2001

OUT for Friday.  Although our indicators are still negative we did not quite get the second sell signal that I was anticipating.  The probabilities on the other hand show a positive leaning.  Staying in the money market for Friday  is best. 

Comments: May 2, 2001

SELL for Thursday.  The closing action looked more like tape painting than serious buying.  The NYSE couldn't make it back over the line and the TRIN  didn't show much support for the up issues.  With a medium strength sell signal, very negative probabilities and amplitudes, a stock  market that looks over extended and a longer term downtrend line coming into play just a few points away (for the chartists), it doesn't fair well.  We could see the last of the pension fund money on the upside the first few minutes, then watch out.  We rarely try to predict more than one day,  but we expect to see some more money flow out of the market on Friday which could mean we have reached a short term top.

Comments: May 1, 2001

BUY continues for Wednesday.  The market is behaving very well.  After spending most of the day locked in a tight range, it picked up support and moved higher.  Building credibility as it advanced, the market closed with an optimistic following.  Tomorrow's probabilities are only moderately positive.  But the potential for a substantial upside thrust makes the risk on the buy side worth taking.  Expect additional help from the pension funds. 

Comments: April 30, 2001

BUY signal for Tuesday.  Wish I could make all calls as well as yesterday's.  We do not have a lot of enthusiasm going into Tuesday, but we made a successful retest of Friday's upside break out and we closed down for the day ending the three day up trend.  This is a good thing, since the traders don't especially like to see four up days in a row, and would be more inclined to sell if we closed up today.  The end of the month will generate a bit of pension buying and should carry us higher for the short term.  But without the emotional kick I don't think we will see a large move here. 

Comments: April 27, 2001

OUT signal for Monday.  We had a buy signal going into the close, but at the final bell it turned into an out.  We got a little more than we expected Friday as the market looks like it has broken above recent tops.  This should cause some early follow through from the chartists.  We are getting into pension fund buying time again which should exert some  positive influences in the beginning to mid week time frame. The interest on ten year notes continues to rise, which concerns me.  I expect an early up and then a retest at the breakout line.  About 1247 on the S&P.

Comments: April 26, 2001

BUY signal for Friday.  The market's ability to hold onto some of today's gains is encouraging.  We expect continued up action tomorrow, but reduced volatility, with the market testing between 1230 and 1245.

Comments: April 25, 2001

OUT signal for Thursday.  Late rally took the market higher than expected today.  Maybe a bit too high for it to continue with much force tomorrow.  We noticed that the interest rate on the 10 year note has climbed 1/2 % higher this past month and would rather see it decline or stay flat to sustain a good rally.

Comments: April 24, 2001

SELL signal continues for Wednesday.  This recent behavior is looking more like a bear market rally than the real thing.  Look for a pick up in volatility tomorrow.  Most likely to get down to the 1185 area on the S&P.

Comments: April 23, 2001

SELL for Tuesday.  Serious sell signal with all images in agreement.  Strong probabilities to the down side. Most likely more action similar to today's.

Comments: April 20, 2001

Continue with BUY for Monday.  Small drop was well contained under 1%.  A good sign that the rally will continue. Our buy signal strengthened, positive probabilities increased but the probable magnitude of the move decreased. All indicating  an up day, but not a spectacular one.

Comments: April 19, 2001

BUY for Friday.  This market looks like it is for real.  Very powerful upswing.  We continue to work on improving the model which we strongly expect will get back in full sync with the market and continue to outperform this market on the up side as it did on the down side. 

Comments: April 18, 2001

A Cautious SELL signal for Thursday. We suggest a 50% short position.  Unexpected rate cut caught us by surprise. But word may have leaked out, since the market was up sharply in the aftermarket last night and I don't think it was all related to the 1Cent better than expected Intel earnings.  I do not expect much follow through here. The option volatility has dropped significantly, which usually has a dampening effect on strong up moves.  But we are not looking to strongly "fight the fed" at this stage. 

Comments: April 17, 2001***Alert

OUT signal for Wednesday.  We have amended our forecast.  The aftermarket is very strong and will prevail.  It does look like the market has made a bottom and will continue to climb on bad news.  It could be a strong day up, but we will miss it. 

Comments: April 16, 2001

SELL signal for Tuesday.  The market closed lower today.  And we got a sell signal right on the close.  With a 70% probability we will most likely go down for the day with the potential for a sizeable drop.  It could be a scary day. 

Comments: April 12, 2001

OUT for Monday.  Markets are closed for the holiday on Friday.  Strong close may be an exhaustion rally. We hope there is follow through because we had a buy signal up to the last few minutes and we are long.  Probabilities are mildly positive. 

Comments: April 11, 2001

OUT for Thursday.  The probabilities are leaning toward the up side, but we do not have a large enough sample size to give a reliable signal.  That is why we had the "*" attached to the %.  We had a solid "sell" signal prior to the last few minutes of the close.  We could have more of today's activities tomorrow.

Comments: April 10, 2001

BUY continues for Wednesday.  Probabilities improved some and the market ended with a very nice gain.  Late trading in the futures market showed a sell off, but we don't think it will carry too far into Wednesdays trading.  No news to speak of driving the markets.  There is some rumor that the Fed may cut rates prior to the scheduled meeting.  I don't believe they will.  But the rumor may keep the shorts from pushing this market much lower.  Today's move kicked our "posted closing signal account" back into positive territory after spending two days below the water level.

Comments: April 9, 2001

BUY for Tuesday.  Although the probabilities are slightly negative for Tuesday the potential rewards are about twice the risk, so it is a buy day.  I was glad to see the market held today.  We saw buying come in at the close as most investors saw the holding as a sign that it is safe to buy.  If we get a good opening tomorrow it should hold. 

Comments: April 6, 2001

OUT for Monday.  One look at the probabilities for Monday and you can see why we are out.  As I said yesterday the key will be how the market behaves in the afternoon. Well we bounced around but ended up at about the same level that we were at, after the first hour of trading.  And that wasn't good. Lesser chance, but if we do have a lower opening on Monday, it could get pretty nasty.  Either way I do not see Monday fully making up today's loss.  

Comments: April 5, 2001

Cautious BUY for Friday.  Reduce exposure on aggressive accounts by 50%.  Our program relies on having sufficient amounts of data to make decisions. When markets move very large amounts up or down in one day we do not have enough examples to use for comparison.  Now our model gave us a buy, but we know from experience that large moves could have exceptions. On the plus side we see that the up volume on NASDAQ exceeded the  down volume by a ratio of 25 to 1.  This was so strong that we would expect to see some follow through. Which could pull the S&P along with it. The so-called cause of the up-move was the after hours report from Dell of meeting a twice reduced earnings forecast. No great shakes. We like to see the market rise on less than stellar news. And the market ignored the China problem.  On the negative side we saw some money flowing out of the market near the close and the Futures premium shrink during the closing 15 market minutes.  We expect to see some weakness on the opening and hope to see some upward follow-though after that. If we get the follow through this bear market could be over.  With the Fed already well into it's rate cuts we could be on our way. Watch tomorrows direction.

Comments: April 4, 2001

OUT for Thursday. We had a chance to catch our breath today but I don't see a quick turnaround for tomorrow.  Mostly confusion and sorting out going on now.  Taking a look at the long term charts for the tech stocks. They look like they are close to support in a relative sense, but coming back to their long term trend line will cause some more pain. If you missed yesterday's comment on our failsafe device take a click.

Comments: April 3, 2001

ALERT:

OUT for Wednesday. We are very close to finishing our Beta testing for our project and had just transitioned over to our multi "image" program.  Very unfortunately for us we accidentally lost one of our failsafe links in the process.  If a buy signal fails by more than 1% there usually is a problem  and it is wise to move into the money market if the next day gives another buy signal. We did that with our account today and should have done the same yesterday. We actually have a buy signal for Wednesday but can not act upon it under these conditions.  We posted a "buy at your own risk earlier (see below) but changed it to an "out" for the above reason.  I have the failsafe routine back in place. If you would like an email alert when we do put out an alert, please send me a note and I will take care of it for you.

We said earlier: "BUY at your own risk for Wednesday. We have a buy signal, but under highly volatile conditions it pays to exhibit some caution.  We are "out" in our active account and realize that we  may miss a strong up day, but I would rather be "the house" than "the player", in roulette and the house has limits.  They expect to make money slowly and not risk it all on one day." 

Comments: April 2, 2001

BUY for Tuesday.  After a nice morning with the S&P going up over 9 points by noon, the market rapidly slipped away.  We continue to get strong signals on the buy side for tomorrow so we will stay in for another day. 

Comments: March 30, 2001

BUY, BUY, BUY for Monday.  These are the signals we look for, "everything-go".  All our images are pointing up, we have more pension money flowing in, and we have an overall positive on our longer term emotion indicator.  There is always the possibility of a loss, but the probabilities strongly favor a buy.  We continue to expand our lead over the indexes.  Have a good weekend. 

Comments: March 29, 2001

OUT signal for Friday.  We did not get the upward jolt that I was expecting.  All indicators are flat for Friday. I do not expect to see much movement, with the range holding between 1140 and 1160 on the S&P, but some pension money should begin to flow tomorrow so we could see some up side.  Our updated system is on line now and we expect to continue to be "in the market" about 3 days per week on average.  I believe everyone will be pleased with the resulting ongoing forecasts.

Comments: March 28, 2001

BUY signal for Thursday.  Very strong signal on the up side for Thursday.  We expect the strong up surge to continue. I feel that this is an important signal, with the end of the month coming in the next few days, we should see some more pension fund buying.  Today's drop came at a good time and although I generally only forecast one day at a time I expect that we could see some good action through Monday.

Comments: March 27, 2001

OUT signal for Wednesday.   We got the strong up day we were looking for.  I don't expect much if any up side tomorrow and the probabilities favor the down side.  The sharp rebound should be about over, at least for a day.  The overall psychology seems to have changed for the better. A down day tomorrow will actually be good for the market on a psychological level. It needs a pause. By next week we will be reporting daily results for our long term emotional gauge. It will forecast a "long term" emotional level projecting over a few days.  

Comments: March 26, 2001

BUY signal for Tuesday.  With all our (5) images pointing up there is a high probability of a good up move.  Things are starting to look better. The "trin" or "arms" indicator, depending upon the quote service you are using, showed a second day of strong volume in the "up" stocks.  Expect a decent up day.  We accomplished a good deal  over the weekend, you should see the results soon.

Comments: March 23, 2001

OUT signal for Monday.  We have completed a longer term optimism/pessimism indicator and will start to post it's readings soon. The fourth market image is complete and is working as expected, a fifth is under way.  I mentioned to my wife Linda yesterday, that although we had outperformed the S&P by over 25 percentage points the last seven months we were hardly up at all.  She said "It takes a lot of work not to lose money in a bear market." Lots more work to do this weekend. 

Comments: March 22, 2001

OUT for Friday. We got the wild day we were looking for in yesterday's comment and the "Out" signal was just fine.  Probabilities are slightly positive, except the extreme negativism would erase that small edge. I believe the  risk is still greater on the downside.  Livestock diseases are starting to spread throughout the world. Although we are not as dependent on livestock as we were maybe 50 years ago, if the crisis worsens, the impact will be felt in many industries and the economy will suffer.   Today's aftermarket action is negative. We are not yet out of the woods. 

Comments: March 21, 2001

OUT for Thursday.  The overriding negativism together with a slightly higher CPI, released before the bell, sent the markets lower today. We expect an exceptionally volatile day tomorrow.  But we don't have a fix on the direction. (Sorry) Brokerage house stocks are a good vehicle to watch at a turn around. They usually get the jump on other industries. Merrill Lynch (MER), has held up during the past week and is a good one to keep an eye on.  Charles Schwab (SCH) on the other hand has fallen down.  In addition to producing more market "images" we are working on a method to sense overall optimism and pessimism. 

Comments: March 20, 2001

BUY for Wednesday.  We have all three "images" agreeing. The Fed may not be as accommodating as we like, but they will get the job done.  Though it may take a bit longer it is better in the long run to squeeze the excess out of the indexes. We got today's signal in barely enough time for the transaction so we only invested a portion into the Rydex Titan fund. The probabilities look very good for an up move at 83%.  A reminder to read about our new "image enhancement techniques". 

Comments: March 19, 2001

OUT signal for Tuesday. With the uncertainty associated with the Fed hike the "out" signal seems appropriate.  Probabilities are somewhat negative.  Last week provided us with some very strong "down" data to digest.  Remember that silly old saying, "What doesn't kill you makes you grow stronger."  It happens to be very true when you work with adaptive systems.  So we are lucky we have the rare opportunity to adapt to both the excessive up swing of recent years and the excessive down mode now, before we have our actual launch. We will also be better protected against this type of drop when we fully implement our "image enhancement techniques".  Read about it, it provides information as to what is happening in the current market,  it is quite exciting and we will start implementing it immediately.  This will temporarily reduce buy/sell transactions to about 25%  of the time from the 40%-60%, but under these conditions we want to only invest when we have the absolute highest probabilities.  If you review last weeks comments you can see that when we had "strong" buy signals we did have up days. So we will limit ourselves to the "best" signals until the market returns to more normal conditions.  A tough lesson, but all is well and better prepared for our launch.

Comments: March 16, 2001

OUT for Monday.  This week we were as good as everyone else and that was bad.  Glad to be out for the week end. With the introduction of adjustable rate mortgages a number of years ago, banks have a lot more protection against interest rate risk.  Yesterday the Senate passed a bill imposing stricter rules for bankruptcy. This would be another big plus for banks.  So the banking industry should continue to stay well.  A good indicator of the health of the economy is the flow of goods through UPS.  My local UPS man says they have not seen any slow down there. Programwise we are still in the process of  implementing our "image enhancing technique" and can see that it is going to be very successful.  Can't work on it fast enough.  It will be fully implemented prior to our opening for business.  Our "charts and data" page grew too large so we cut it down for easier loading and limited it to the start of actual trading. The old page can still be found here.

Comments: March 15, 2001

BUY again for Friday.  This is the first string of five buy days in a row since last May. But I don't see any significance to it. We have a full set of buy instructions with somewhat lessening probabilities.  The bit of strength that was shown in the NASDAQ100 turned into a loss.  Not a lot to like in this market.  Our program is independent of the economy, but we still like to see the general direction of the market as up and the business climate booming.  Interest rates are slipping lower and now the whisper is a .75% cut.  There was an old saying "Don't fight the Fed", but this market has ignored it. Why?, Maybe because as I said on March 13 this bear wasn't caused by high interest rates, so maybe lower interest rates are the wrong pill.  I still think that lower interest rates are positive, but maybe something else is needed.  My point of view is that lower interest rates aren't inflationary, quite the opposite.  When a public utility needs to borrow huge amounts of money for a power plant lower interest rates will help keep the rates paid by the public lower. With lower interest rates people can pay less of their income out each month for their mortgage. These are very basic costs of goods and services.  It is high interest that is inflationary. Only extremely high interest rates could be considered as anti-inflationary, because that is when people refuse to borrow so few companies and people actual pay them. And the economy contracts.  We are still buying. 

Comments: March 14, 2001

Another BUY for Thursday.  This is a very strong buy. Stronger than the buy we had on Monday's close. The downside risk is rather strong because of the increase in volatility, but we go with the probabilities.  As long- term investors we know that overall, the probabilities will continue to be in our favor as long as we continue to be up at bat.  Any single day or week can be unpleasant but this method is independent of the economy.  Word from Japan early this morning was that 19 banks are in trouble. This was coupled by the Goldman Sax downgrade of European banks.  And the downward spiral began.  Can the US banks be very far behind?  A look at the chart of the US Banking industry shows that it is still significantly above its October and November lows. If they were in trouble the banking industry would be leading the market down which in not the case.  Looking for a strong up day tomorrow. 

Comments: March 13, 2001

BUY signal stays on for Wednesday. The signal is losing it's strength, but the downside risk does not look so bad compared to the upside potential.  This is a different bear market from the rest. Previous bear markets were caused by high interest rates strangling the economy.  This one seems to be caused by overextended security prices adjusting back to reality.  You might call this more of a psychological bear.  Psychological or not, it is real.  And it has a real effect upon the economy.  It doesn't matter if the economy caused the bear market or if the bear market causes the economy to tank.  But given enough time to adjust I can see a strong recovery and a more sober attitude towards share prices. We will now be posting our actual aggressive investing account results weekly, posted on the forecast page. 

Comments: March 12, 2001

BUY signal continues for Tuesday.  Today was a very bad day. This puts us only $2 ahead since the start of this year in our fund shown under Charts and Data. Although greatly ahead of the S&P or Nasdaq we expect better.  The signal is a strong buy for tomorrow on all fronts, with this caveat, when we have an up signal that fails for some reason and it is followed by a second up signal we find that the probabilities fall off some.  When looking at the probabilities for tomorrow we do see that there is substantial down side risk, even with 72% positive probabilities.  You may want to reduce your exposure during these extreme moves, we have.

Comments: March 9, 2001

BUY signal for Monday.  These past two weeks were an exercise in discipline and patience.  For those of you who kept coming back to see those "out" signals, give yourselves a back-pat, you did well.  Though money market money  won't make you rich, this week it saved us 2%.  Today's Buy signal for Monday is reasonably strong, but not one of those super signals we get about every three months....  Intel's poor quarter is as much about the economy as it is about AMD's strategy and accomplishments.  They (AMD) are real competition in the PC processor market...  The S&P500 made another closing two year low.  The S&P futures backed off after the close, indicating that a down side test of today's inter-day low might happen early Monday morning.  Our signal and probabilities indicate that we should get a partial recovery Monday, we would guess about 1%.  The Dow had a bad day, but closed up for the week.... I posted one of my rare alerts yesterday about 1-1/2 hours after the close.  If any of you are interested in getting those alerts by Email let me know and I will try to set something up. Enjoy the weekend. 

Comments: March 8, 2001

OUT signal for Friday.  The S&P500 price is moving in a tighter and tighter range each day. This is indicative of a market that does not know where to go.  Our indicators are very flat.  So we will just have to wait it out.  The Old economy stocks, represented by the Dow have made a decision to the upside, and the New economy & tech stocks, Nasd100, have made their decision to the down side, both tugging at the S&P.  The Dow however should run into some resistance as it comes back near the 11000 mark and the NASD100 will find support as it tests a recent bottom made March 1st.  Patience.

****After the close alert:  Intel announced it will reduce staff by 5000 over the next 9 months and expects 1st quarter revenue to fall 25% below 4th quarter level. This might be the jolt that moves the market out of its slumber.  The S&P futures index is down 9 pts as of 1-1/2 hours after the close. 

Comments: March 7, 2001

Yet another OUT signal for Thursday.  But don't go away yet.  If you look at an hourly chart you will see what the chartist call a flag or pennant pattern.  The S&P prices have moved up and down over the past two days in a triangle formation and we are getting close to the small tip.  Near that point we would expect a more explosive pop.  Probably to the upside.  Now today's action had some promise of a buy signal but one necessary element was missing and we remain out.  Now we could get that pop to the upside tomorrow and we will miss it, but the key to success for this program is the ability to out perform the markets over time and not any particular individual day or week.  Boring as it may be to make money slowly. 

Comments: March 6, 2001

Our 6th OUT signal in a row for Wednesday.  We got a taste more than the slight up we were expecting for today. But overall the S&P is still three tenths of one percent below where the S&P500 was, six signals ago, when we started calling outs.  Staying in the money market when there are no clear signals is an important part of the investment strategy.  I do realize that for most investors you would rather see me making a more exciting projection, and I will as they happen. For now, there is an ever so slight negative leaning to the probabilities, but not nearly enough to consider making a trade.  The S&P futures have closed leaning a bit to the up side. The VIX index of option volatility has backed off, and is now almost exactly even with the average volatility for the last six months.  Things look pretty even.

Comments: March 5, 2001

OUT signal continues for Tuesday.  With the storms keeping traders away from the street, trading was low today.  The final figures favor the Bulls by a small margin, and the futures have traded up a bit in the after market. Our signal is OUT, with the most likely direction up, by a small amount.

Comments: March 2, 2001

OUT signal for Monday.  We have run into a string of out signals as this market has drifted slightly lower.  Our gut feel is that the market should soon start to climb back up as the Fed continues to cut rates.  The excesses over the past few years apparently has been a damper on this.  The Nasdaq is working its way on down to more traditional valuations. And the S&P500 does have its share of tech stocks. 

As we pay off the national debt we are in effect buying back government bonds.  The purchase of bonds causes their price to rise and interest rates to fall.  This is probably what has kept the long term bonds interest rates at such low levels relative to our recent past.  As this continues the lower rates will shift the demand for quality over to the private sector and cause a drop in interest rates on the highest quality bonds.  These dynamics are slow changing but do have an impact on the relationships that affect the stock market. As we take into account the new data, and rerun our program to digest the data, we find that overall the program results do not change very much.  But they do change slightly adding in effect another snapshot of the market and how it acts.  Reflecting not only a variation in conditions but a change in investors.  As our program adapts to the evolving economy, it is reassuring to know that the basic instincts of investors remain stable over the years. 

Comments: March 1, 2001

OUT signal once again for Friday.  It looks like the market may have exhausted itself after that rapid climb in the last hour and a half of trading.  It does look like a double bottom was put in today.  I expect a calmer day on Friday, with a slightly positive bias.

Comments: Feb 28, 2001

OUT signal for Thursday.  Today's closing probabilities are almost the reverse of yesterday's in as far as the greater probability is now on the down side, but the larger move in points is favored on the upside.  We are in the money market for Thursday.  We will wait for a better signal and avoid unnecessary risks.  I am very excited about our new refining technique mentioned in yesterday's comments, and will let you know when it is fully implemented. 

Comments: Feb 27, 2001

OUT signal for Wednesday.  We had some money moving to safer ground on the close changing our buy signal to an out signal.  The probabilities are favoring the upside, but there is more to lose on the down side based upon the average size drop.  Safe to stay out. We, however, are still long in our accounts due to the rapid change on the close. You can see information on this under RISK.  We will soon be implementing a refining technique to our forecasts that we are borrowing from NASA.  It is a method of enhancing astronomy photographs to separate out the faint stars from the noise.  It is very applicable to the work we do here and we have a good way to implement the technique.  We expect it should somewhat reduce the number of Buy and Sell trades by a small amount but increase the reliability of the trades.  No changes are being made to the basic program.  

Comments: Feb 26, 2001

BUY signal for Tuesday.  Wayne Angell, former Federal Reserve governor and Bear Stearns' chief economist,  giddy with the power of manipulating the market up from its lows on Friday restated his comment that Alan Greenspan would cut rates this week ahead of schedule, only this time he upped the odds from 60% to 80%.  The investors loved it and continued to push a resistive market higher.  Can Mr. Greenspan be goaded into a rate cut ahead of schedule? Especially in light of the much higher PPI and CPI numbers? Will a rate cut this week send a scare signal to investors that the market is in worse shape than they thought?  Will waiting a few weeks for a cut make an economic difference?  None of these questions will have much of an impact on our program.  I don't believe Greenspan will cut rates early;  but we also have an  80% probability of our own for the market rising tomorrow.  

Comments: Feb 23, 2001

SELL signal for Monday.  I believe we put in a bottom today that should hold for awhile.  However there is still about 2-1/2 % between today's close and today's low point.  I suspect that we will head back to test that area. The "sell" signal is moderately strong and the probabilities confirm it. We have had two days where the market dropped sharply and recovered most of the loss.  I would expect that if we see Monday start lower, it might just continue till the close. Any up move Monday should be relatively small. 

Comments: Feb 22, 2001

OUT for Friday.  Well, we got the pause we were looking for, but we also got a V bottom.   The probabilities are very even, slightly favoring the up side.  Without being able to hold substantially above ground we are not overly optimistic.  One very nice thing about this program is that we never feel "locked in" and we never feel uncertain. We are not always correct, but we are always in control.  This has been a short, but good week for us and I don't mind spending a day in the money market. 

Comments: Feb 21, 2001

Reverse position and BUY for Thursday.  The probabilities suggest that tomorrow's market will have a pause and small bounce, retracing part of today's drop,  rather than a sharp V bottom recovery. We are not expecting too much up side, but think the downside will relax for at least one day. These past few days are a good example of how having a portion of your funds in a program like this could be beneficial to your portfolio.  The program, together with your existing stocks and mutual funds acts as a "hedge fund" providing protection through "non-correlation" with your existing portfolio.  This year, the  S&P 500 is down -4.9% and our white fund is up +7.4% see charts and data. 

Comments: Feb 20, 2001

Once again, SELL for Wednesday.  We like down days much better when we are ready for them, so this one was fine.  More tomorrow?  The probabilities aren't as strong on the down side, but strong enough to go with the sell signal. It doesn't look like investors are happy yet.  In any event the volatility has picked up so the moves are getting larger.  On the plus side, the S&P futures rebounded a bit, raising the premium over the cash after the close. 

Comments: Feb 16, 2001

SELL signal for Tuesday. Sorry folks, we are not soothsayers, and can only reflect where investor emotion and money flow is pushing the market.  Nortel announced bad earnings after the close, and before the opening bell the producer price index showed a jump about four times higher than expected.  Since the PPI measures wholesale prices, it is representative of what sort of inflation is in the pipeline.  We certainly don't want an inflation problem preventing the lowering of interest rates.  Add in a little Iraq bombing and we  end with a loss close to 2% on the S&P.  This was not a good week.  But nothing unexpected in the big picture.  By avoiding excessive leverage, and maintaining a consistent approach, the program will continue to return positive results over the long term and we are long term investors.  We are still up for the year about 3 1/2% Charts and data. Program will be upgraded Monday, so just keep watching.  It will be worth it. 

Comments: Feb 15, 2001

BUY for Friday. The probabilities are not very strong, but the risk looks low. It appears safe to buy.  Our program has adaptive learning capability,  but it can run a long time without a "tune up".  Over the next few days we will feed the program some additional recent data, it is a slow process and requires a number of our machines.  We try to update whenever the performance seems sluggish. *** Evening alert: The S&P futures are headed lower this evening  after Nortel cut earnings estimates, earlier today its competitor Ciena said its earning were topping expectations.  Interesting how easily investors are swayed. 

Comments: Feb 14, 2001

OUT signal for Thursday.  Another day where the early momentum ran out. This time it started on the down side.  The NASD100 and DOW pulled in different directions. The DOW down about 1% and the NASD100 up almost 4 1/2% this caught the S&P in the middle ending with a small decline. We prefer to see all three markets act together. We are in the money market for tomorrow. 

Comments: Feb 13, 2001

SELL signal for Saint Valentines day.  As the early enthusiasm ran out, the market rolled over and the signals reversed themselves one more time.  There might be a few more shakes in our forecasts but the market should get back to normal soon.  Mr. Greenspan's speech did not seem to address anything unexpected but I guess some of the investors were looking for more.  He did speak of psychology as being a significant part of any improvement in the economy. Saying that with all the improvements in information technology "human nature remains unaltered".  He added that the fluctuations in the economy were a "process driven in large part by non-rational behavior."  And with regard to the non-linear changes in human behavior said, "They may not be just changes in degree from a period of economic expansion, but a different process engendered by fear,''  Thanks Alan, that's the stuff that makes our program work.  Also be sure to read our new page on artificial intelligence.

Comments: Feb 12, 2001

BUY signal for Tuesday. The probabilities have reversed from Friday.  Today's up move went against strong probabilities to the down side, which emphasize the need to keep from being over-leveraged.  Tomorrow Alan Greenspan addresses the Senate Banking Committee.  I don't expect any surprise there.  This past Friday, Nobel prize winner, Herbert A. Simon died.  He was a pioneer in Artificial Intelligence. Together with Allen Newell they are credited with writing the first Artificial Intelligence program "Logic Theorist".  They recognized and addressed the fact that human thinking has it's own set of peculiarities that could not be easily defined by linear mathematical equations.  A section on Artificial Intelligence will be added to this site in a few days. 

Comments: Feb 9, 2001

SELL signal for Monday.  We anticipate more downside action for Monday.  The probabilities are very negative.  The markets have gone negative for the year but our accounts are still doing fine. Our S&P closing signal account is up 7.6% for this year, 2001.  You can track in our Charts and Data, it has only a 60% exposure to the market since it is in the money market 40% of the time. Our more aggressive real money account is up 12.1% for 2001. 

Comments: Feb 8, 2001

OUT for Friday.  The probabilities and the low close on the S&P futures market  indicate that we may see some more selling tomorrow.  However we stick with our OUT signal generated by our program.  The NASDAQ 100 lost 2 1/4 %, a sharp move down but less than I expected in yesterday's comment.  Since January 17 the S&P 500 has gone nowhere, the NASDAQ 100 has dropped 8% and we have been in the money market 65% of the time up from the usual 40%.

Comments: Feb 7, 2001

SELL signal for Thursday.  Selling signal is relatively strong and so are the probabilities.  Could see a sharp move down in the NASD100.  The earnings reports after the bell were mostly negative with the exception of EDS. On the positive side the S&P futures gained about 3 1/4 points in the last 15 minutes pushing the market above fair value.  We are expecting a down day.

Comments: Feb 6, 2001

We are OUT for Wednesday.  After surprising early strength the market drifted lower ending almost unchanged.  The probabilities are very even for tomorrow so we are in the money market.

Comments: Feb 5, 2001

We are extending the SELL signal for Tuesday.  The probabilities seem very strong, but we prefer to have seen a larger sample size.  The larger the applicable sample size of data (under similar conditions of emotional response and money flow), the more reliable the forecast. 

Comments: Feb 2, 2001

The signal for Monday is clear, SELL.  The probabilities are 2 to 1 that the market will continue it's downward move on Monday. Volatility has increased, which is good for us, since it shows a deeper emotional commitment.  Our usual conservative nature kept us out of today's market drop (see yesterday's comment).  Avoid the risks and the gains will take care of themselves.  This is a very serious business and with skill and patience one can carefully make steady profits.   

****We have started a waiting list for you readers outside of California.  Since we will only be able to take 5 clients from each state without having to register in that state, anyone who thinks they might be interested in investing with us should get their name on the list for their state.  Email or call us and we will give you a number. There is no obligation, and you will have first right of refusal when we start taking clients.  We will greatly expand our reach starting next week, if in the future you have trouble accessing the site a particular time of day, please let us know. 

Comments: Feb 1, 2001

Weak BUY signal for Friday. We decided to sit this one out in the money market for our own account. The signal was weak and wavered near the close.  Today's market moved between plus and minus a number of times and the VIX index continued to decline reflecting the small net changes each day.  It hasn't been this dull since late last summer. 

Comments: Jan. 31, 2001

We got an OUT signal after the close for Thursday.  The probabilities suggest that a sell signal might be more in order, and our actual account is in fact in the Tempest* fund for Thursday.  Please see risk for why our actual trading signal sometimes differ from the posted signal and why it usually does not matter too much over the long term.  The market gave up more than I expected later in the day, but still not very much. This market is still subdued, with many mixed low level emotions.  * We had a weak but steady sell signal going into the close. The Rydex Tempest 500 dynamic fund acts in reverse of the S&P500 with about two times the amplitude. 

Comments: Jan. 30, 2001

Finally we have a BUY signal for Wednesday. The probabilities look good and the volatility should show some increase.  I expect that if we have an up day most of the gain will come early in the day.  This should get the Fed watching out of the way for a while and maybe things can get back to normal.

Comments: Jan. 29, 2001

One more in a long series of OUT signals for Tuesday.  The Fed meeting has slowed this market down for over two weeks.   It is kind of like being in rush hour traffic, you can change lanes but it doesn't help.  Our actual account did well today in the Rydex Titan fund bringing us to another new high, but I can't take much credit for it since Friday's end of the day signal was an "out". (See Friday's comment and risk for an explanation.)

Comments: Jan. 26, 2001

The week ends on an OUT signal for Monday.  We had a "buy" signal nearly all day and our actual account is long for Monday. The out signal came in the last few minutes of trading.  Dow and Nasdaq still acting counter to one another. The S&P futures market's premium over the cash is near fair value.  No signals here.  Enjoy the weekend. 

Comments: Jan. 25, 2001

Yet another OUT day.  Very flat signal. Greenspan's talk did little to change the energy. The NASD100 however dropped about 4.8% and closed at it's worst level of the day.  Greenspan's comments on the growing energy crisis would point to another 1/2% rate cut and that seems to be fully factored in. 

Comments: Jan. 24, 2001

OUT again for Thursday.  Probabilities lean on the up side but not enough for us to take the risk.  I expect an action signal tomorrow, as something should give, after Mr. Greenspan's speech.  Just keep watching and be patient. 

Comments: Jan. 23, 2001

One more OUT day for Wednesday.  We have now had five of our last six trading days as "out" days.  The S&P has gone up 2 1/2 % over that time, and the daily changes have been small.  The VIX index which measures volatility based upon the values of the S&P100 option prices has dropped about 15% in that time period.  This often happens during "rounded top" formations (when viewing a chart) where the traders do not expect large changes in any direction.  The probabilities have turned slightly negative today indicating the market may want to test the 1353 area where it had some resistance.  The futures backed down a few points after the close supporting this. 

Comments: Jan. 22, 2001

OUT signal for Tuesday.  The volatility has dropped sharply the past two weeks with the average change being just over 1/2% per day compared to an average change of 2 1/2 % per day the week before.  This program works best when emotions and volatility runs high so I hope we see some more soon.  The California power crisis knocked this site off line last Friday (our host is in Northern California)  so if you didn't see us for a while that was what caused it.  It didn't have any effect on our functioning here, since we are in Southern California and are not in that soup. But I expect you will hear more about it and that the problems will spread to other states and impact the stock market before they are solved.  We have been very quiet and have deliberately not placed ourselves on any search engines to date.  If any of you get a chance I would like to know how you found us, and where you are located.    

Comments: Jan. 19, 2001

Minor SELL signal for Monday.  Not a lot of enthusiasm in this signal, but the probabilities look worthwhile.  Futures dropped a bit more after the close.  Unless Bush can rev up the nation Saturday, this market will probably go lower on Monday.  I posted an update on our investment program progress. 

Comments: Jan. 18, 2001

The third OUT day in a row for Friday.  There is a positive build up, but not sufficient for us to engage.  We are patient investors and prefer to have the odds firmly in our favor.  We invest by our own rules and stick to them.  Remember an "out" day for us does not mean we believe the market will only move a little bit.  It means only that we do not see enough of a combined emotional/cash flow signal to indicate that the market can overcome minor after close influences. 

Comments: Jan. 17, 2001

OUT signal continues for Thursday.  The market only added to its uncertain direction today taking a long ride to nowhere and completely balancing out our indicators.  We will stay in the money market until investor's emotions show the way. 

Comments: Jan. 16, 2001

OUT signal for Wednesday.  Probabilities are somewhat negative, and I do not see much upside potential here.  The out signal came near the close and bounced between sell and out for a while.  Our accounts made another new high today. Our real money account is now split half in the money market and half in the Rydex Tempest (Down) no-load fund for tomorrow. 

Comments: Jan. 12, 2001

We have a BUY signal for Tuesday.  Markets will be closed for Dr. Martin Luther King Jr. holiday Monday.  The CME Globex will be trading after hours on Sunday afternoon and Monday morning.  The market seems to be in a base building phase.  We might see a bit more volatility on Tuesday judging from the "probabilities".  Although the probabilities look good the signal itself was not very strong and was in "sell" territory most of the day moving into the buy area near the close.  Since we trade with the Rydex 2x Dynamic funds we reduced our exposure for Tuesday to 1x keeping half the money in the money market for the long weekend.

Comments: Jan. 11, 2001

OUT signal for Friday. We are entering a congested trading range here and should not see much progress tomorrow.  Our accounts made another new high today. Our real money account utilizing the Rydex Dynamic funds is now up about 40% since inception (the end of August).  About half of the gains were made since we started posting each day's trade (the end of October).  We noticed an overall change in investor attitude today as the TRIN index stayed well below "1" all day, showing more volume going into the rising issues relative to the amount of volume going into those that declined.  

Comments: Jan. 10, 2001

We have a weak BUY signal for Thursday.  The market took almost all day to decide where it would go, passing through the zero point about a half dozen times.  Adding to our weak buy signal, the general market looks like it will go higher with the Russell 2000 index climbing up, out of it's trading range.  The premium on the S&P500 futures index closed a few points above fair value foretelling a strong opening.  A good indication but be careful. 

Comments: Jan. 9, 2001

We are OUT for Wednesday and into the money market.  Our accounts inched out another new high today.  The probabilities favor the downside for tomorrow, but not a strong enough risk/reward ratio for our program to put us in the market.  We are patient and will be back in soon.  The S&P futures closed a few points below fair value;  the most likely direction for tomorrow is down.

Comments: Jan. 8, 2001

We continue our BUY forecast for Tuesday.  Although the enthusiasm has weakened along with the signal, and probabilities, they are still strong enough to buy.  The NASD100 and the S&P futures market closed up for the day after a long slow day down under.

Comments: Jan. 5, 2001

Looks safe to BUY for Monday.  Wild week, we continue to make new highs in our accounts, pulling very far ahead of the S&P.  Strong indications that Monday will be a very good day, does not appear to have very much more immediate risk on the down side.

Comments: Jan. 4, 2001

SELL for Friday.  Investor emotion is still negative, even after that big up day Wednesday.  It looks like a 2 to 1 chance of going lower tomorrow.

Comments: Jan. 3, 2001

Spectacular day, now get OUT for Thursday.  We expected a very strong day (see below) but were delighted to be helped out by a rate cut.  The probabilities for tomorrow are very even, so it is wise to get out.  As you can see on the Charts, our white account made a new high today as did our real money account.  So enjoy the money market for tomorrow.

Comments: Jan. 2, 2001

Don't panic.  We have an exceptionally strong BUY signal for Wednesday. We got the increase in volatility I mentioned in the last comment.  Most likely scenario for tomorrow is a strong opening followed by a very strong up day.  See the probabilities for similar signals. 

For earlier comments made in year 2000