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In a message dated 2/29/00 4:51:23 AM Pacific Standard Time, JSessi5941
writes:
<< But can you tell me why you bought the s&p on fridays sell off? >>
Hello James,...
II tend to be more aggressive,..and use overseas follow through in
addition to other methods. Basically each day at the close I am
in one of three places....S&P500,...Intntl EAFE typ Growth,..or
Money Market (cash). Regarding whether to use the S&P500,...
Last Fri,...when Europe closed,..the Dow was down -82,...and the S&P500
was down -3.4 pts. At the end of the day,..the dow was down -230 and the
S&P500 down -20. So indications were that overseas would decline,...in
follow through to the late day selling in the US. SO I DID NOT WANT TO
BE OVERSEAS,...over the weekend,..etc. The reasons I went into the
S&P500 instead of the money market were varied but include: (excerpts
from my personal notes):
"Dow 9829 and S&P500 1330 BOTH key fibonacci retracement levels. Near these
levels @ Fri's close went long the S&P500. Note pattern of recent Friday
weakness:
01-28 (-289.15), 02-04 (-50.44), 02-11 (-218.42), 02-18 (-295.05) and 02-25
(-230.50),..most drops followed by bounce next 1-2 days. Note VIX tested
"Buy" threshold 30.0 level on Fri,...reaching 29.51 intraday.
Importantly, seasonally favorable "end of month" inflow period begins Mon
02-28, which also is indicated as a Time Ratio Low (inverted triangle) for
NYSE Comp which is testing key Oct 1999 low. Market may be set up for
a sharp 1-3 day rebound.
Not all is constructive. Very weak Daily Index put/Call ratio (w .825, Th
.890,
F .6760 in synch with WEAK Weekly CBOE P/C ratio at 0.36 (note 0.34 is
market toping) both indicate "overbelief". Yet, Consensus Weekly % Bulls
survey at modest 27% Bulls on Stocks, is at lowest level since late Oct ‘99,
very constructive from a contrary perspective."
So those were my thoughts at the time ,...and that is why I was
long the S&P500 as of Friday's close.
Hope this helps,..
Regards, JIM Pilliod jpilleafe@xxxxxxx
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