Replies to post #37906 on A.I.M. Users Bulletin Board (AIMUSERS)

[OldAIMGuy]

Hi Toof, Re: v-Wave...................

The v-Wave is a calculated value based upon new weekly data and the residual of the previous data. In other words, it's a smoothed (or moving) average of the data.

The raw weekly data is also calculated. The difference between the calculated raw data and the smoothed data is the Oscillator. So if each week we subtract the Raw from the Smoothed, we get a value. That value can be plus, zero or minus.

A negative value indicates that the smoothed value is higher than the raw value. That indicates the market risk is drifting lower than its recent history. The opposite is true, also. If the value of the Oscillator is zero, it means there is no difference between the smoothed and raw data indicating market risk is steady and unchanging.

So, in general, a positive Oscillator means market risk for current and near future investing is on the rise. A negative value means risk has started to decline from recent levels and the investing climate is improving.

I'll see if I can plot the Oscillator against the v-Wave. Maybe that would be helpful.

Best regards,

[SFSecurity]

Toofuzzy wrote:

To me the oscillator turning negative means the market has topped, is likely to turn down, and while risk in absolute terms might be declining and the V wave may decrease in the future, it may be worthwhile to wait before investing new money or creating a new AIM account.

I don't know about the oscillator or even really understand how it functions, but I think he is right about taking a wait and see approach for a while. Of the new IPOs last week, most failed to gain traction and lots of the market is moving sideways it seems to me. Might just be a needed correction after last year or it might be a harbinger of a longer down trend. I'd say keep bot your cash and powder dry.

Best.

Allen