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From: cpj@uofm-cv.UUCP
Newsgroups: net.invest
Subject: Re: CBOE 100 Options
Message-ID: <228@uofm-cv.UUCP>
Date: Thu, 4-Aug-83 15:50:39 EDT
Article-I.D.: uofm-cv.228
Posted: Thu Aug  4 15:50:39 1983
Date-Received: Sat, 6-Aug-83 08:40:36 EDT
References: mhuxi.264
Lines: 13

There are a number of reasons for the present decline and a number
of indicators that seem to work slightly.  There are  2 forms of
the Modern Portfolio Theory.  The weak form is that technical analysis
can't predict trends in the market on a short-term basis of 1-13 weeks.
These are the periods of time I think this has been tested on.  The stronger
form is called the efficient market hypothesis that states that fundamental
analysis does'nt work on a risk (beta) adjusted basis.  The reason it doesn't
work is that while earning estimates have predictive value if correct,  earnings
also are a random walk.  However some indicators such as those used by Zweig
are of some value in doing better on the market maybe.  Treasury bill and
related interest info such as free reserves seem to have some predictive value.
The current rise in interest rates which has started in June or July may indicate
further declines.  However much of the effect of this all may have been disipated in July.