headsup.doc ... by Chas Richards As with previous of my Beasley modules, this is based heavily upon Don Beasley methods) ... This module seeks to increase the awareness and importance of market health in day-to-day decisions. It gives a "heads-up" on the current Beasley environment, showing the current McClellan Oscillator value for the dominant index, environment, Price Oscillator and High/Low Indicator. Don Beasley's research has shown that almost ALL of the possible OTC gain occurs when the the OTC Price Oscillator > 0 (when the 19-day exponential moving average of OTC-C is above its 39-day exponential moving average. The gains are almost as spectacular for the NYSE Price Oscillator. If the McClellan Oscillator is positive, the McClellan Summation Index is improving. Beasley has found a positive expectancy to exist when the Summation Index is above 1000 most bad things happen when the Summation Index drops below 1000 and continues to fall. Beasley considers the High/Low Indicator his best sign of when a market top may have been reached -- when the number of 52-Week New Highs begins to be outpaced by the number of 52-Week New Lows. If the McClellan Oscillator and High/Low Indicator are both positive and rising, an extremely aggressive stance is urged. If both are negative and falling, it's suggested that any funds with negative momentum be jettisoned. It's recommended that no new domestic funds be purchased so long as the McClellan Oscillator remains negative. Foreign funds could be bought if positive across-the-board and beating to their own beat, unaffected negatively by the U.S. market. The module then shows the market position and recommended market exposure, based upon the Beasley scorecard for the dominant index. The score ranges from 1 to 15 when the Nasdaq is dominant and from 1 to 13 when the NYSE is dominant -- depending upon how many of the indicators are positive i.e., Advances vs. Declines New 52-week highs vs. New 52-week lows and Up Volume vs. Down Volume. The powerful up moves frequently come on the heels of a major decline (10 percent or more), and the funds that got hammered the hardest in the decline frequently are the ones that will be the most potent on the rebound. So funds with a large MDD are not a negative. Ranking is by RELATIVE STRENGTH vs. 5%, so that a fund underperforming cash would have a minus in the Relative Strength column. The fund performing best would have the highest Relative Strength rating. As in past modules, fast Stochastics parameters of 21/13/2 are used during a negative Beasley environment and slow Stochastics parameters of 34/21/2 are used in a positive Beasley environment. The intent is to shake you out more quickly in risky times and to prolong your time in the market during good times. A fund may be bought if RSI/Stochastics are above 50 and none of its columns are negative. No purchases are recommended that would cause holdings to exceed the exposure recommended by the Beasley Scorecard. Sell any fund whose RSI/Stochastics falls below 50.