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         Daily Blog - Tiger Software

                            August 6, 2007

Is it Time to Panic?

             "What Me Worry?"

William Schmidt,     - Tiger Software's Creator
      (C) 2007 William Schmidt, Ph. D.  - All Rights Reserved. 

      No reproductions of this blog or quoting from it
      without explicit written consent by its author is permitted.

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      to william_schmidt@hotmail.com

              We See Lots of  "Down Volume"
         Have We Reached A Significant Bottom?          wpe3.jpg (4601 bytes)
"What, me worry?"

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Has there been a crescendo of selling that has produced a climactic low.  Over 70%
     of the volume on the NYSE has been in declining stocks for the 10 days ending 8/3/2007.
     Brett Steenbarger reports that since 1960, only 76 times did this occur out of almost 12,000
     trading days.  He looked at those cases and he found that the "market" was up 41 times
     and fell 34 times by a week later.  However, three weeks out the market rose only 36 times
     and fell 39 times.  A month later, 51 of the 75 instances were lower.  That's helpful.
http://traderfeed.blogspot.com/2007/07/are-we-making-bottom-in-stock-market.html )

The cases he lists are mostly in very different circumstances that the present case.
     He doesn't list all the cases.  But I have decided to   find all the cases where
     NYSE down volume jumps to such levels
with the DJI still above the lower band, as it has in
     the present case,
and within a month of the DJI making an all-time high.   I start with the Summer
     of 1965.  That is the earliest that Barrons distinguished NYSE Up and Down volume. 

    There is only one other case where NYSE down volume so dwarfed NYSE Up Volume.
That was in August 1998 when the Federal Reserve under Greenspan bailed out the stock
     market when billion dollar Long Term Capital Management collapsed.
  Compare the charts of
     1998 with 2007.  Backing and filling like we are now seeing led to another 12% break in the
     market.  But then Peerless gave a timely Buy signal and the market rose sharply.


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If you are using Peerless, you would know it's best to wait simply
               for a Peerless major Buy signal.  And you would have been out of the market since
               8/18/2007 when the DJI was at 14,000.  Are you wondering whether it's to late to Sell
               or when to Buy. 
Get Peerless or our Hotline.

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                        Wall Street Is Putting Massive Pressure on Bernacke To Cut Interest Rates

                  A typical example.

             "In 2007, the Federal Reserve is more concerned with inflation, a misplaced concern considering
             U.S. home prices are still crashing, suggesting incipient deflation is a concern. With the ongoing
              turmoil affecting the credit markets, Bernanke should cut short-term interest rates now or at the
             Fed’s next FOMC meeting. All high-risk segments of the corporate and mortgage-backed market      
             are hemorrhaging, a clear warning that there’s a credit bubble currently unwinding, threatening the
             financial system unless immediate liquidity is created to assist all parties and counter-parties affected.
             Also, the country’s banks are coming undone, sliding to new 52-week lows this week as concerns
             mount that loan-losses will increase as sub-prime defaults spread to the next tier of borrowers"   


                                                 Is This What Lies ahead?

                 The danger is the market will go into a 1974 like free-fall.  Bush like Nixon may be impeached.
              The US is in the swamp of a losing  Asian ground war.  Oil prices are jumping.  (I have to add,
              Peerless users know there are also significant techincal differences between now and 1974.)

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