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Here is what the ER ratings say for the NDX 10/06 accompanied with a
candlestick chart of the breadth chart. Price levels are somewhat
different than the actual NDX chart. The NDXgroup is composed of the
entire 100 NDX stocks and their advances, declines, new highs, new lows,
etc. Lee points out a valid concern about testing the validity of this
indicator. As of now there is no easy way to come up with the statistics.
What I have found visually is that when a 95 or greater reading on the
breadth indicator occurs, it is wise to give it some attention. The
point here is these are volatile stocks, even moreso than the OEX and
volatility is sometimes a clue to market direction. So if these stocks
head south significantly, then the bluechippers may be right behind. This
used to work using biotechs as a leading indicator. Seemed like those in
the know started shorting these things before the bigger caps.
BobR
At 08:51 PM 10/6/97 -0500, Lee Clayton, D.D.S. wrote:
>Bob:
>
>I assume your group consists of the entire OEX 100 stocks? Also, using the
>conventional reading on AIQ it doesn't matter that the AIQ dropped 2 points
>or whatever. What IS significant is that you had 2 Sell signals in a very
>short time period. Then you need to look at what rules caused the sell
>signals. IF they are basically the same rules firing to give you two SELL
>ER's then that is ok, but not very significant. However, if they are
>different rules that fired and caused two sell signals then it becomes even
>more powerful sell signals.
>
>Have you had a chance to back test the NDX100 group you built using the AIQ
>breadth builder and see if the ER's are a good indicator of turning points
>over several different market senarios? The new product, Expert Design
>Studio, due out at the end of 1997 (which I am alpha testing now) will have
>a backtester program to really see if the the market you built using Breadth
>Builder is really a tradeable vehicle.
>
>Just a few comments......hope no one as a problem with my 2 cents worth.
>
>Lee Clayton
>-----Original Message-----
>From: bobrabcd <bobrabcd@xxxxxxxxxxxxxxx>
>To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
>Date: Monday, October 06, 1997 7:26 PM
>Subject: MKT - NDX
>
>
>Attached is today's AIQ breadth reading for the NDX100. The Expert Down
>rating has dropped two points from 100 to 98 and the ER Up rating has risen
>1 point from zero on Friday. The NDX futures lost a point and the cash
>gained a few points, basically a flat reading on price.
>
>BobR
>
>
>
Attachment Converted: "c:\eudora\attach\ndxER1006.gif"
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