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Was looking at my continous contract of the Russell futures the other day and
noticed that it is only 15% above April 94 levels. I do keep a cash chart with
both S&P500 and S&P600 (S&P small cap index). Not only has the 500/600 relative
strength been going straight up since early May, but the S&P600 has sunk
dramatically below the lower bollinger band (2sd) of the 150dma. In fact the S&P
has closed for two days in a row below 3sd of the 150dma! This is convincing
evidence that the market is in very deep do-do. CNBC should have a show devoted
to stringing up all the talking heads they've had this spring/summer trying to
talk up small
caps!
Earl
-----Original Message-----
From: Gerrit Jacobsen <jrt@xxxxxxxxxx>
To: Robert W Cummings <robertwc@xxxxxxxxxxxxxxxxxx>; omega-list@xxxxxxxxxx
<omega-list@xxxxxxxxxx>
Date: Wednesday, September 02, 1998 2:07 AM
Subject: Re: Russell Stock Index A leading Indicator
Normally you have got the following effect : At the beginning of the
large move up (I am talking about months and years here) people buy
blue chips. At a later stage these get expensive and all the players
look for stocks which have been left behind in their P/E valuations.
On the move down exactly the opposite happens: Last in / first out ->
flight to quality.
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