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This is the chart beginning 1970 which should have accompanied my post.
-----Original Message-----
From: Earl Adamy <eadamy@xxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Date: Sunday, March 28, 1999 2:20 PM
Subject: Re: MKT Weekly NYSE breadth turns more bearish
>An interesting question arrived privately which I hope might generate some.
>I'm attaching the earliest history I have for this series beginning in 1970
>to which I've added a pair of heavier lines outside the "normal" range
>lines. A couple of items stand out:
>
>1) the extreme low pivots have generally indicated market bottoms and have
>been followed by a strong rise in the indicator. In the most recent case,
we
>had a much more extreme low without a significant rise followed by another
>decline.
>
>2) the sharp rises of around 800 points from the bottoms have generally
>signaled the beginning of a strong advance. In the most recent case, we did
>have a nearly 800 point rise off the extreme low, however that rise did not
>come close to taking out the prior pivot high or rising into the green
>overbought zone.
>
>A couple of explanations come to mind:
>
>a) A larger number of NYSE listed issues would generate more extreme
values.
>
>b) We could be completing a major bull market top, however weekly
historical
>data is not available for comparison with the previous bull market top in
>1968.
>
>c) The deeply oversold level is indicative of a bottom and we are merely
>retracing some of the nearly 800 point rise which will be followed by a
>breakout above the previous pivot high. This hypothesis appears to be
>unsupported by comparison with previous major lows.
>
>Comparing these bottoms to the S&P Earnings Yield/TBill Ratio chart I post
>here frequently, I do note that the ratio has been in the .5-.6 range with
>each of the significant market bottoms while the most recent bottom was
>accompanied by an extremely high reading of 1.1 which left little room for
>ratio expansion and the ratio recently hit a record (since 1941) value of
>1.549 . We have no irrefutable proof, but the combination would suggest
that
>the probabilities lie with the bull market top hypothesis.
>
>Earl
>
>-----Original Message-----
>>Thank you for your work.
>>Why do you suppose the amplitude of your OB/OS indicator has increased so
>>dramatically since mid '97?
>
>
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