GREAT CALL MARK!!! You too Alex. I'm with you. The Cook Cumulative Tick Index just needs a little recalibration. We'll just reschedule for March 2008. Waiting for the crash with bated breath, Emilio
Are you serious? Keep working at it? The guy's been trading over thirty years, has been daytrading the S&Ps for somewhere around 20 years, and is the only S&P index trader profiled in THE NEW MARKET WIZARDS. The indicator is notorious for being early. It is not really for daytraders as much as it is for longer-term traders. One can easily go long in the current bull market while watching for signs of weakness--one foot in, one foot out. I do find it interesting that while the markets made new highs last week, the VIX did NOT make new lows. That suggests to me that many want to take advantage of the current momentum but are waiting to bail at the first sign of trouble. Is Cook always right? No, of course not--none of us are. One must not blindly take anyone's advice; those who think for themselves are the ones with the best chances to succeed. But I do like to hear what he has to say, because his is the voice of experience.
Personally I have no idea who Cook is but he shouldn't make predictions of 20 plus % drops based on a few tic readings. The flow of funds right now is from overseas that's what matters presently. The way this year shapes up with a big tech spending spree about to burst forth... it's going to be very tough to get a 20% drop in the market without an exterior (political/ military/financial) event triggering it- and that would not be reflected in any counting of up ticks. Early indicators are like broken clocks- they're eventually right- but the problem is- boy cried wolf syndrome - by the time he's right- no one will be listening. ~ stoney
A good correction is due, but doubtful to be on the scale of 2000. In 2000 the S&P was trading at over 30 times earnings and nearly two times sales. Today it's 1.2 times sales (a 40% discount) and roughly 17 times earnings. A drop of nearly 20% would put the S&P back into real "value" territory. The NYSE and other major indices corrected more than 10% several times over the last few years, even though they have come straight back up. So I guess my question is, What is a 10% drop in your definition? Do you have a minimum time period that the market must remain down to qualify? By the way, the price level of the S&P is still lower than the highs reached on March of 2000. Does seven years to make a new high qualify?