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Joe F. Rocks!
Growth Stock Investor & Market Strategist

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Joe F. Rocks! Growth Stock Indicators Updated 5-26-03

Growth Stock Timeliness - Tuesday - Untimely (Weakness during much of Tuesday's session with a close less than 1% up is a "hit!.")
- Very Short Term (2-3 Days) - Untimely (Dramatic rise in complacency recently.)
- Short Term (2-3 Weeks) - Untimely (Very moderate intermediate term cycle low on March 13, but there's been a dramatic rise in complacency since NDX broke it's trend of declining peaks about five weeks ago (established an intermediate term uptrend), an intermediate term cycle high (NDX) appears to have occurred on Tuesday May 13, and a short and intermediate term technical sell signal occurred on Monday May 19).)

Next Session Accuracy/Usefulness Rating - NASDAQ - 86.5 out of 107. 80.84% ("Hit!" NDX in negative territory during much of the early and late part of Friday's session and closed slightly lower.)
- Gold Stocks - 31 out of 42. 73.81% ("Hit!" XAU in negative territory during much of Friday's session and closed slightly higher. This for now will only be a test of XAU implied volatility mechanically interpreted (no judgement) since I usually get the data a day late (I will probably augment this system with two more implied volatility indicators (real time data) similar to how I time the major averages.).

The NASDAQ Composite (COMPX) opened slightly lower at 1506.64 on Friday, and, thanks to Thursday's substantial rise in complacency, COMPX spent the entire session in negative or modestly positive territory with a close slightly higher at 1510.09, +2.54 (+0.17%).

The NASDAQ wall of worry (VXN (NASDAQ 100 Volatility Index) and QQV (QQQ Volatility Index)) shrank on Friday with VXN revealing that a significant rise in complacency occurred for NDX (NASDAQ 100) and QQV revealed that a very sharp rise in complacency occurred for QQQ (NASDAQ 100 Tracking Stock). The NASDAQ is deemed untimely on Tuesday.

An intermediate term cycle high appeared imminent in recent weeks due to the collapse of the wall of worry (VIX, VXN, QQV) relative to the market (OEX, NDX, QQQ) (major rise in complacency) to extremely low levels which is an extreme of complacency typical of intermediate term cycle highs. An intermediate term cycle high for NDX (NASDAQ 100) appears to have occurred on Tuesday May 13 at 1165.53. Thursday 5-15's high of 1164.50 tested Tuesday's high. Value stocks peaked later than growth causing a likely S & P 500 (GSPC) intermediate term cycle high on Thursday May 16 (GSPC 946.67).

Also, the fact that the wall of worry fell much more in percentage terms than the market rose in recent weeks (major rise in complacency) portends dramatic weakness in the near future (weeks/months following an intermediate term cycle high).

A significant rise in complacency occurred for the NASDAQ 100 on Friday, with VXN (NASDAQ 100 Volatility Index) falling -0.38 (-1.26%) to 29.73 while NDX (NASDAQ 100) fell -1.40 (-0.12%) to 1130.05 which reveals that a significant rise in complacency occurred for NDX because VXN fell significantly in percentage terms despite NDX (NDX wall of worry shrank) falling slightly which portends weakness in NDX on Tuesday.

A very sharp rise in complacency occurred for QQQ (NASDAQ 100 Tracking Stock, +0.01 (+0.04%) to 28.10) on Friday since QQQ rose much less in percentage terms than QQV (QQQ Volatility Index, -1.00 (-3.94%) to 24.37) fell (QQQ wall of worry shrank) which portends weakness in QQQ on Tuesday.

On Friday VIX fell (-0.24 (-1.11%) to 21.38) versus a rise in OEX of +0.37 (+0.08%) to 469.75 which was a significant rise in complacency for the S & P 100/value stocks (OEX is about 75% value stocks) since the wall of worry (VIX) fell significantly more in percentage terms than OEX (S & P 100) rose which portends weakness in OEX on Tuesday. The S & P 100 is deemed untimely on Tuesday.

RSI for NDX/QQQ is on a sell signal (NDX 1 year chart with technical indicators) that was confirmed on Monday 5-19 when stochastics and MACD flashed sell. It appears that an intermediate term cycle high (very moderate intermediate term cycle low occurred on March 13) for the NASDAQ 100 occurred on Tuesday May 13, so this technical sell signal is an intermediate term as well as a short term technical sell signal.

The CBOE Put/Call Ratio at a moderate (at or above 0.50 but below 0.75) bordering on elevated level (at or above 0.75 but below 0.90) of 0.74 at Friday's close suggests there will be modest strength early on Tuesday because it's a reliable non-contrarian indicator of the next session's early action except at extremely high (at or above 1.05) or extremely low levels (at or below 0.50) where it sometimes is also a contrarian indicator (sometimes portends early substantial strength (below 0.50) or a sharp rally following early potentially severe weakness (at or above 1.05), judgement is involved).

The NASDAQ TRIN closed at a modestly bullish level of 0.75 (significantly more activity in rising issues) trending higher on Friday which is modestly positive technically but the uptrend during the last hour and a half is a negative because breadth deteriorated significantly. A level between 0.35 and 0.80 is a bullish range for the NASDAQ TRIN because it indicates much more activity in rising issues. A NASDAQ TRIN above 1.00 indicates more activity in declining issues. A NASDAQ TRIN between 1.20 and 1.50 is a clearly bearish "red zone" range because it indicates much more activity in declining issues but not a very oversold condition. If the NASDAQ TRIN rises above 1.50 you can begin to look for a rally and if it rises above 2.00 that tends to be a reliable short term buy signal (very oversold condition).

Investor's Intelligence (survey of 130 newsletter writers) percentage of advisors bullish fell to a still high level of 54.40% on May 14 (jumped to 56% on May 21) after rising to a very high 55.80% bullish on Wednesday May 7 from 48.30% bullish on April 30, from a low level of 42.70% bullish the week before that. In two weeks these "gurus" (spectacular contrarian indicators) rose from a low 42.70% bullish to a very high 55.80% bullish. Amazing. Many of these folks must get on the phone and change in tandem (it appears)! Otherwise, how could the number change so dramatically so quickly.

One has to understand fundamentally what's going on in the economy. Outside of autos and housing (spurred by rock bottom interest rates which is a clear sign of a weak economy) the US private sector is recessionary and much of the world is in the same boat. Companies like Cisco Systems (CSCO), Intel (INTC), and Applied Materials (AMAT) have negative top line (revenue) year over year growth on the order of -4%+. Bull markets aren't built on negative growth and layoffs.

Were it not for tax refunds, last minute 2002 IRA contributions (4-15 deadline), short covering, and the Iraq war, March 13 might not have been an intermediate term cycle low. The wall of worry's (VIX, VXN, and QQV) collapse since breaking the trend of declining peaks (establishing an intermediate term uptrend) that's been in place since December 2's intermediate term cycle high, shows how anemic/unhealthy this intermediate term cycle is. The new wall of worry established on March 13 wasn't substantial enough to result in a long healthy intermediate term cycle which is why the wall of worry collapsed dramatically in recent weeks.

The weak US dollar is a result of the weak US economy, burgeoning budget deficit, and higher rates in Europe which attracts capital to Europe, thereby strengthening the Euro against the US dollar (USD) despite an even more sluggish economy in Europe. The USD has declined sharply even when the major US stock indices rallied sharply recently which is a negative divergence. The U.S. DOLLAR INDEX June 2003 (FINEX) closed at 95.58, -0.95 on Tuesday May 6 despite firmness in the major averages for example.

American Association of Individual Investors (AAII) % bullish (AAII has been a useful non-contrarian sentiment indicator at extremely low levels below 40% bullish and extremely high levels above 60% bullish.) @ 38.5% bullish is a negative factor for the prospects of stocks during the week ending 5-30 because it is at a low level of bullishness.

This is an extremely complacent/very low volatility environment similar to March 2002 when VIX fell to nearly 18 and VXN fell to nearly 35. The major averages peaked (intermediate term cycle high) in March 2002 (actually the major NASDAQ averages/growth stocks peaked (intermediate term cycle high) in December 2001 (NDX) and January 2002 (COMPX)) followed by a dramatic decline until the July 24, 2002 intermediate term cycle low when VIX rose above the extreme level of 50 (VXN to 69.75) and triggered a new intermediate term cycle (that ended when the October 10, 2002 intermediate term cycle low occurred). A similar dramatic decline is likely during the next few months.

The current low volatility/high complacency environment (VIX, VXN, and QQV very near their lows for this intermediate term cycle which began on March 13, 2003 shortly after VIX rose above the very high level of 40) is characteristic of important tops wether they are short term, intermediate term, or long term tops.

Recently there's been a fair amount of cautious chatter regarding the gold stocks which makes little sense to me since the US dollar has been acting poorly and gold very well. The gold stocks have been acting well bouncing off the top of their uptrending intermediate term channels with the XAU clearly breaking out of it's uptrending intermediate term channel on Monday 5-19 (HUI has also).

Intermediate term cycles tend to follow parabolic patterns, so the breakouts for HUI/XAU above their uptrending intermediate term channels isn't surprising.

The XAU still has to contend with the top of it's giant triangle formation (currently near 80) going back to the late May 2002 intermediate term cycle high before a major breakout occurs. It appears that an explosive rally similar to what occurred in May of both 2001 and 2002 is underway however, but, in the short term, the upside is being limited somewhat by a fairly narrow uptrending short term channel (the top currently near 77).

The stocks have been somewhat subdued for technical reasons such as the XAU's nearly year long giant triangle pattern and HUI's nearly year long (wide) trading range. Since the XAU is very near the end of the triangle, the moment of truth is fast approaching, and, given how favorable conditions are for gold now, isn't the risk dramatically to the upside on an intermediate term basis (dramatic upside breakout likely soon)?

Given a year long trading range, a much higher gold price, and with the Fed about to, in all likelihood, soon cut rates in an attempt to boost economic growth which will hurt the US dollar and help gold, why are so many cautious right now? Also, as discussed below, on an intermediate term basis, gold stocks peaked long after the major averages in the preceding three intermediate term cycles. However, in the intermediate term cycle that began in early April 2001 the gold stocks hit an intermediate term cycle high at the same time as the major averages but gold was still in a long term downtrend (Bear Market) at that time.

In the last three intermediate term cycles gold stocks rallied for a month or two after the major averages hit an intermediate term cycle high. There was an intermediate term cycle high for the major averages in March 2002 and gold stocks exploded until the end of May 2002. There was an intermediate cycle high for the major averages in late August 2002 and gold stocks rallied well into September 2002. There was an intermediate cycle high for the major averages on December 2, 2002 and gold stocks didn't peak until January with HUI hitting an intermediate term cycle high in early January and XAU peaking in mid to late January.

It appears the NASDAQ 100 (NDX) hit an intermediate term cycle high on Tuesday May 13 at 1165.53 which suggests gold stocks will rally until mid June and possibly into July on an intermediate term basis.

Gold experienced an intermediate term cycle low (near the bottom of it's uptrending price channel) on Monday 4-7 with a session low of $319.20. Gold fell a bit below the bottom of it's "hidden channel" on Monday 4-7. It appears that seasonality (linked to gold's cycles) may be a major factor for gold stocks with huge rallies culminating in intermediate term cycle highs in late May during both 2001 and 2002.

On Friday there was a very sharp rise in gold stock complacency since XAU (Philadelphia Gold and Silver Index) IV (Implied Volatility) Index composite fell 4.25% to 28.36% (from 29.62% on Thursday: -1.26%/29.62% x 100%) versus the XAU rising 0.22% that portends weakness on Tuesday because (the gold stock wall of worry shrank) XAU implied volatility fell very sharply in percentage terms despite the XAU only rising modestly. However, the decline in Bernie Schaeffer's gold stock put/call ratio to 0.64 on Friday from 0.65 on Thursday portends strength.

On Thursday there was a sharp rise in gold stock complacency since XAU (Philadelphia Gold and Silver Index) IV (Implied Volatility) Index composite fell 0.37% to 29.62% (from 29.73% on Wednesday: -0.11%/29.73% x 100%) versus the XAU falling 2.32% that correctly portended some weakness on Friday (XAU in negative territory during much of Thursday's trading and closed slightly higher at 73.99, +0.16, +0.22%.) because (the gold stock wall of worry shrank) XAU implied volatility fell modestly in percentage terms despite the XAU falling sharply.

On Wednesday there was a modest rise in gold stock complacency since XAU (Philadelphia Gold and Silver Index) IV (Implied Volatility) Index composite fell 2.17% to 29.73% (from 30.39% on Tuesday: -0.66%/30.39% x 100%) versus the XAU rising 1.75% that correctly portended weakness on Thursday (XAU in negative territory during all of Thursday's trading and closed sharply lower at 73.83, -1.75, -2.32%.) because (the gold stock wall of worry shrank) XAU implied volatility fell modestly more in percentage terms than the XAU rose.

Bernie "Schaeffer's Daily Sector Snapshot" reveals that the put/call ratio for ten gold stocks (including five that I own: AU, GFI, GG, HL, HMY) has risen dramatically since November 15 from 0.31 to 0.64 as of Friday. Having observed this indicator for a while I now believe that it's generally a useful non-contrarian short term indicator for gold stocks just as the CBOE Put/Call Ratio (this one has a shorter 2-3 hour timeframe) and AAII are for the major averages.

Bernie's put/call ratio for ten gold stocks is at 0.64 on Friday from 0.65 on Thursday which portends strength on Tuesday. The very sharp drop to 0.65 correctly portended strength on Friday (as the rise to 0.76 on Tuesday portended some weakness (early) on Wednesday and the rise to 0.79 on Wednesday portended weakness on Thursday). HUI and XAU are near the bottom of their short term uptrending channels. The decline from 0.55 on Friday 4-25 to 0.51 on Friday 5-2 was a positive that correctly portended strength. Keep in mind that the risk is to the upside in an intermediate term uptrend.

HUI (AMEX Gold Bugs Index) stochastics, RSI, MACD, and ROC are all on a buy signal now. HUI is on a short term buy signal with a well defined short term uptrending channel. May has been a very strong month for gold stocks the past two years, so keep that in mind.

The very high HUI volatility on Friday 3-28 is characteristic of bottoming activity and exceeded that of the intermediate term cycle low that occurred on October 10, 2002.

Keep in mind that the metal lags the gold stocks on a long term (and apparently intermediate term basis with an intermediate term cycle high in early February versus the stocks peaking in January and an intermediate term cycle low on April 7 nearly a month after the stocks hit an intermediate term cycle low on March 13) basis. The metal recently had an enormous rally from the $300/Ounce area to about $388. It played catchup with the HUI which is a good sign (HUI rose 70-75% in both 2001 and 2002, outperforming the metal, and began it's Bull Market in late 2000 about 5-6 months before the metal).

A gold stock Bull Market (The New Bull Market!) began in late 2000. I suspect there will be a huge rally in the next few months (an intermediate term buy signal occured on Friday 3-28 with HUI rising 7.91%) as occurred in 2001 and 2002 this time of year. Short covering will be a major factor because the gold stock market is still a relatively small one.

Look for gold to trend higher this year and long term. $330.00, a major resistance level, was broken on Thursday 12-12-02. There might be a lot of money to be made in the gold stocks during the next few weeks but keep in mind they tend to be extremely volatile as they have been recently. The 50 basis point Fed rate cut at the November 6 FOMC is a major positive for gold stocks. The rapid growth in the money supply is a major positive for the precious metals. The Fed is in the unenviable position of having to inflate (decrease the dollar's value) in order to keep the economy afloat.

Thursday 12-12's major breakout above $330/ounce confirms a likely long term Bull Market for gold and is a major long term buy signal.

Recently (early February's intermediate term cycle high) gold volatility became very high which correctly indicated there would be a major move down. The spike up in volatility accompanied the very sharp rise to the $388 area and correctly identified a short term peak in gold. It appears that extremely low volatility marks gold bottoms at least on a short term basis and extremely high volatility marks important short term tops which is the opposite of what happens (at least on a short term basis) with the major averages where extremely low volatility marks tops and extremely high volatility marks bottoms on both a short and intermediate term basis (The extreme cycle low on 9-21-01 occurred at an extreme of volatility that saw VXN rise above 91. A sell signal occurred in March 2002 when VXN fell below 40 because it indicated that an extreme of low volatility was near. All the major averages (growth and value) began trending lower at that time though the major NASDAQ averages began trending lower in early January because growth stocks hit a cycle high at that time.).

It appears the market may be heading for another short intermediate term cycle (began on March 13 when VIX hit 40 but VXN was at a very moderate level of 43) such as began on July 24, 2002 and October 10, 2002 when VIX rose above the extreme level of 50.00. So, I'll be looking for another important cycle low when VIX reaches 50+ (and/or if VXN reaches the extreme level of 80+).

VXN is new as of January 2001 so not enough data exists yet to be a statistically meaningful sample size but identifying major deltas in fear (Delta VIX/VXN) and peaks in VIX/VXN can identify likely cycle highs and lows. The principle of a major rise (delta) in fear or complacency leading to major rallies/declines in the major averages is a sound one as is the degree that fear or complacency creeps into the market as it rallies/declines (how well the wall of worry holds up) portending strength (when fear creeps in) or weakness (when complacency creeps in). This chart of the percentage moves in VIX and VXN versus the S & P 500 (SPX), the Dow (DJIA), and the NASDAQ Composite (COMPX) illustrates that sound principle of market timing.

Two extremes of fear (VIX hit the extreme level of 50+ on 7-24-02 and 10-10-02 and VXN rose to moderately high levels of 69+ and 64+ respectively on those dates) in 2002 led to (triggered) intermediate term cycle lows. When VIX and VXN both exceeded extreme levels (of 50 & 80 respectively) on 9-21-01 (VXN hit 91+) a healthy long intermediate term (6 month+) cycle ensued (an extreme intermediate term cycle low/major bottom occurred).

It appears that when VXN (growth stock volatility) exceeds 80 as opposed to (just) VIX (value stock volatility) reaching 50+ a more extreme cycle low occurs and a healthier, longer intermediate term cycle is likely to occur. This makes sense since 80+ is a much more extreme level of fear/volatility than 50+ and explains why both July 24 and October 10 were "moderate" cycle lows and didn't last as long as the cycle that began on 9-21-01.

Value stock volatility (VIX, OEX Volatility Index, is mostly value stock volatility because the S & P 100 appears to be about 75-80% value stocks. VIX largely reflects value stock volatility) is running ahead of growth stock volatility as it did when the July 24, 2002 and October 10, 2002 intermediate term cycle lows occurred with VIX at a low level (between 20-25) at 21.38 as of Friday's close and VXN at a very low level (below 40) of implied volatility/fear at 29.73. For VXN to be at a "high" level of implied volatility/fear it would be at or above 60 which is where it was (at 64+) when the October 10 (the second "VIX 50.00" moderate cycle low in 2002) intermediate term cycle began. Growth stocks are much more volatile than value stocks hence the differing levels for "high" implied volatility, "very high" implied volatility, etc. for VIX and VXN.

The disparity between growth and value stock implied volatility/fear is "preventing" an extreme cycle low by triggering an intermediate term cycle low before NASDAQ/growth stock implied volatility/fear (VXN/QQV) becomes extreme (occurred twice in 2002). I think VXN must at least reach 75 and probably near or above 80 before an extreme cycle low can occur. It reached 91+ when the last extreme cycle low on 9-21-01 occurred as I've discussed previously. It also spiked above 80 when the April 2001 cycle low occurred. We got another "VIX 50.00 rally" (moderate cycle low) on 10-10-02 and a very moderate cycle low on March 13 when VIX rose to 40ish but VXN was only at 43ish.

Nova Fund Assets/Ursa Fund Assets closed at 0.140 on Friday which is bearish (falling again indicating rising/high fear - the cycle is heading down. The fact that this indicator jumped so dramatically so quickly was a major negative because it revealed a major degree of complacency crept into the market far too quickly and easily (just as occurred after the rally following the October 10 intermediate term cycle low).).

Also, NASDAQ/NYSE Composite NH (New Highs)/NH+NL (New Lows) closed at 0.960 on Thursday 5-15 (NA on Friday) which is bearish.

NASDAQ/NYSE Composite NH/NH+NL is definitely a primary indicator being that it's a breadth indicator. Also, the Rydex Nova/Ursa Ratio is a primary indicator because it's a fundamental measure of wether investors are bearish (more money in the defensive Ursa Fund) or bullish (more money in the aggressive Nova Fund).

The moderate intermediate term cycles after the July 24, 2002 cycle low (and after the October 10, 2002 and March 13 cycle lows) strongly supports my view that VXN must approach or exceed 80 as it has in recent intermediate term cycle lows (growth stock fear must become extreme) in order for a true extreme cycle low (major bottom) to occur.

At true extreme cycle lows fear becomes much more extreme than it did on 7-24-02, 10-10-02, and 3-13-03 (VXN at about 70 on 7-24-02, at 64 on 10-10-02, and at 43 on 3-13-03. Spiked to 91+ at the September 21, 2001 cycle low and well above 80 when the April 2001 cycle low occurred). Also, complacency doesn't creep back into the market as quickly as it did during the recent moderate intermediate term cycles after 7-24-02, 10-10-02, and 3-13-03. In other words, buckle up!

People who mechanically rely on one indicator such as VIX tend to get into trouble. This is why I look at a variety of primary indicators such as VXN, QQV, VIX, Advance/Decline Ratio, Up/Down Volume, total volume, money flow, Investor's Intelligence survey of advisor bullishness, etc. I would call the July 24 and the October 10 Bear Market lows moderate intermediate term cycle lows because VIX reached an extreme level of 50+ but VXN fell well short of an extreme 80+ (it rose to about 70 on 7-24-02 and 64 on 10-10-02. Spiked to 91+ on 9-21-01).

Intermediate term cycles tend to be 3-12 months in duration in recent years. There were two intermediate term cycle lows in 2001 (April and September) with September 21, 2001's being a major bottom (extreme intermediate term cycle low where VIX > 50 and VXN > 91 on 9-21-01).

Since there was an enormous rise in complacency during the intermediate term upcycle after the March 13 very moderate (VIX rose to a respectable 40+ but VXN only rose to 43+) intermediate term cycle low (VIX, VXN, and QQV fell dramatically), the primary growth stock indicators portend an intermediate term cycle high in the near future (May have occurred on Tuesday May 13).

Breadth, a primary indicator, was positive on Friday with NASDAQ A/D at better than 18:13 in favor of advancing issues and NASDAQ Up/Down Volume was in favor of up volume by better than 9:5. Once the cycle low occurs and a new upcycle begins breadth should turn convincingly positive during the early high fear part of the cycle. Growth (NASDAQ is mostly growth) will be more timely than value (NYSE is mostly value) but both should rise sharply during the early high fear (VXN > 60, VIX > 30) part of the cycle.

VXN is at 29.73 as of Friday and I expect it to briefly spike above 80 and possibly even 90 the day an extreme cycle low (major bottom) occurs. It's likely that will be the only day that VXN spikes above 80, especially if it rises above 90. The more extreme fear becomes the more likely a "V" shaped cycle low occurs as opposed to a "W" shaped retest cycle low occurring probably as a result of a more moderate peak level of fear. VIX (OEX/value stock implied volatility) reaching 50+ is another likely indication that an intermediate term cycle low will occur (be triggered by an extreme of fear) soon, but is a much less extreme cycle low than when VXN (growth stock volatility) reaches 80+.

A great trading opportunity may occur in the next few months. Keep in mind that from the September 21, 2001 COMPX intermediate term cycle low of 1387 to the intermediate term cycle high in early January 2002 of about 2100 COMPX gained about 50% in three and a half months. So, a very nice gain will probably result if one buys QQQ near the cycle low and exits once a complacent, fairly low volatility market arises.

One needs to keep in mind that the sentiment picture can change drastically in a few hours or even less from what I discussed using the previous close's sentiment figures. It's important to look at VXN intraday and compare it to the figure I discuss from the previous session's close. If fear rises substantially (large + Delta VXN) that portends a rally and if complacency jumps (large - Delta VXN) substantially that portends weakness. An unexpectedly large jump in fear or complacency can dramatically change the very short term sentiment picture.

It's important to remember that when capitulation becomes a major factor that fear/volatility (VXN) can rise dramatically and though that normally would portend a nice rally, a lag time arises and one has to wait for the cycle low to go long QQQ once serious capitulation begins. The steep drop and quick snapback at NASDAQ cycle lows tends to form a V (a retest of the cycle low is a possibility also which is a W).

I suspect that the more extreme fear/volatility becomes (VXN spiking above 90 to 91+ as it did on 9-21-01 when the last extreme cycle low (major bottom) occurred) the more likely a "V" will occur and a more moderate peak level of fear/volatility (VXN spiking well above 70 but failing to reach 80) greatly increases the likelihood of a "W" pattern (retest and potential double bottom formation) cycle low occurring.

The moderate level of implied volatility/fear has a high correlation with a moderate level of volatility. Daily moves in COMPX on the order of 2%+ aren't surprising. Volatility (VXN) may rise sharply in the next few sessions because the intermediate term cycle is heading down and implied volatility (fear) tends to rise as the market falls.

If you buy QQQ at the wrong time you might experience substantial downside. Buying very near the cycle low takes nerves of steel and is only for highly skilled traders due to the extreme volatility. Don't try this at home unless maybe you are a highly skilled trader or you can live with a great deal of risk. For neophytes IF you try to trade the gold stocks or QQQ (or any highly volatile stock) you should only be using a modest amount of risk capital and should have a risk mitigation strategy.

Happy trading, may the force be with you,

Joe F. Rocks!

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The dashed lines above are for the folks at Trading-Ideas.Com and AfterHourTrades.Com so they know which commentary to use.

When using this site I suggest that you might need to open the home page in a number of different windows. You might want to access a number of pages at the same time such as this page, Astrikos real time VXN, Astrikos real time COMPX, etc. I added more real time resources to help time the upcoming cycle low and to improve the short term trading resources.

Please tell everyone about Joe F. Rocks! via word of mouth and email. Why not shoot an e mail right now to as many folks as you can think of? You'll feel better after doing so. Things are going well for me. I plan to soon get into the money management business and/or start a cycle timing service. I have an outstanding risk averse strategy that buys growth at cycle lows, switchs to value when a complacent market arises (after a major bottom/extreme cycle low), and shorts QQQ when a major sell signal occurs such as when VXN fell below 40 in March 2002 when COMPX was at 1950. I'm also learning how to time gold stock intermediate term cycles which can potentially earn returns in excess of 100%/year.

If someone knows of another timer/web site who makes the distinction between growth and value in terms of timing please e mail me and I'll post it here somewhere. Bottom line is that you are getting great information for free (at least for now). I now believe that I am one of the very few timers who knows how to time the market in both fearful and complacent markets AND who truly knows how to maximize returns with low risk by buying at cycle lows and being in growth when growth is timely and value when value is timely (as well as gold/silver stocks when they are timely and parking in the money market when transitions are (may be) occurring).

This in from Escol8th!

"Joe -
James Stack (www.investech.com) makes the distinction between value and growth in his work. He tends to focus on the longer term and employs several proprietary indicators. " Thanks Escol8th!

Also of course the CBOE Put/Call Ratio is a useful non contrarian indicator of the next trading session's action (at least the early part of the next day's action) with an elevated (>0.75) or high (>0.90) CBOE Put/Call Ratio pointing to weakness during the next NASDAQ trading session. When the CBOE Put/Call Ratio is very high (at or above 1.05) then the CBOE Put/Call Ratio might be a useful short term contrarian indicator (some judgement is involved).

The cycle low will probably occur when the OEX Volatility Index VIX > 50 and/or the NASDAQ 100 Volatility Index VXN > 80 as was the case during previous cycle lows in April/September 2001 and July/October 2002.

Why not make Joe F. Rocks! your start page? In Internet Explorer under "Tools" select "Internet Options" then select "General" where you can set your start page to http://www.joefrocks.com/ . At the very least if you like this site add it to your favorite places in a spot where you can readily find it. Please continue to tell your friends, relatives, and associates about Joe F. Rocks! via e mail and word of mouth!

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Intermediate Term (3-6 Months) - Untimely. Likely to fall more than 15%.

Are growth stocks in a Bull Market??? - Before I declare that a new Bull Market in growth stocks has begun I want to see NASDAQ Institutional Money Flow establish a clearly positive trend of accumulation as opposed to the current trend of net selling.

Investor's Intelligence @ 56.00% of advisors bullish (On 5-21) - Investor's Intelligence is a primary barometer of the timeliness of growth stocks.

NASDAQ "Institutional" (really block trading data that includes individuals as well) Money Flow (Primary growth stock indicator) for the week ending 5-23 = Positive (possibly due to massive short selling on Monday 5-19). Uptick block trades outpaced downtick block trades (790 more uptick blocks) by 2.20% (1.53% more downticks the prior week, 0.59% more upticks the prior week, 1.65%, 0.74%, 1.72% more downticks the prior three weeks, 5.67%, 2.54%, 0.80% more upticks the prior two weeks, 1.36% more downticks the prior week, 1.27%, 2.98%, 2.86%, 1.58%, 2.42%, 3.97%, 2.87%, 4.46%, 3.58% more upticks the prior nine weeks, 0.70% more downticks the prior week, 0.35% more upticks the prior week, 0.78%, 0.76% more downticks the prior two weeks, 2.96%, 1.86%, 0.07% more upticks the prior three weeks, 0.98% more downticks the prior week, 0.61%, 0.29%, 1.80% more upticks the prior three weeks, 0.84% more downticks the prior week, 1.02% more upticks the prior week, 0.91%, 0.94%, 1.21% more downticks the prior three weeks, 1.34%, 1.23%, 0.53%, 0.08% more upticks the prior four weeks, 1.14%, 1.57% more downticks the previous two weeks, 0.24% more upticks the prior week, 1.71%, 2.90%, 0.70% more downticks the previous three weeks, 0.74% more upticks the previous week, 2.81%, 2.32% more downticks the previous two weeks, 0.82%, 1.23%, 1.08%, 0.40% more upticks the previous four weeks, 0.57%, 3.28%, 0.45%, 2.16%, 0.76%, 1.13%, 2.39%, 0.19% more downticks the previous eight weeks, 1.07% more upticks the week before that, 2.34%, 3.49%, 3.52%, 2.34%, 1.15% , 0.69%, 0.89%, 1.49%, 0.87%, 2.48% more downticks the previous ten weeks. 1.20%, 1.50% and 0.60% more upticks the three weeks before that.).

The trend has been (past 32 months) 1% more downtick blocks than uptick blocks each week on average .

NYSE block trading data reveals very strong net buying for the week ending 5-23 though I don't tally it. Inflows have been very strong in recent months. This bodes well for a very strong rebound in the Dow and NYSE Composite (value stocks) after an extreme cycle low (major bottom) occurs.

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