Overheard On The Street
Peter Eliades, Editor and Publisher,
StockMarketCycles.com: “Yesterday, on September 18, 2000, for only the
seventh time in the last 73 years, the signal which I call the Sign Of The Bear
was triggered. There are three requirements for the Sign Of The Bear. Number one
is a period of at least 21 market days where the advance/decline ratio is in a
very narrow confine, and that’s not above .65 and is below 1.95. I call that
period a churning period because you don’t have any really big up or down days.
“The trick is to find between 21 and 27 consecutive days with that
pattern, and then look for a break in that pattern. The break in the pattern has
to be to the downside. It has to show an A/D ratio below .65. This time around,
that break came last Friday when we had a advance/decline ratio of .59. What is
required after that, the final requirement for the Sign Of The Bear, is that
once the streak is broken, you’ve got to have either a two-day average or a
three-day average on the advance/decline ratio be at .75.
“That third requirement we had yesterday, so now we’ve had an official
Sign Of The Bear. These signs have occurred either very close to or at seven major
market tops over the last 75 years. It’s never taken more than five to six weeks
after the signal has been given for the market to reach a major market
top.”
Kenneth Pasternek, Chief Executive
Officer, Knight Trading Group: “While the Nasdaq Composite is currently
relatively flat to down for the year, we still don’t think there’s any ability
for a sustained rally because we don’t see any broad-based public interest in
the marketplace. We’re relatively cautious about the intermediate outlook until
we see a catalyst for individual investors because we think that ultimately that
is the group that will take the market to higher levels. We just don’t see a
catalyst right now.”
Buzzy Geduld, President, Herzog Heine
Geduld: “We’re actually seeing a little more volume than we’ve seen lately,
and things have a better tone today. So it’s sort of a correction day, but again
it’s perked up for the first time in a couple of weeks. I don’t know why they
were down yesterday, and I can’t tell you why they’re up today.”