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WALL STREET, CALIFORNIA: Third-Quarter Fund Review
and Outlook

Stock Market Barometers

October 06, 1998

Fundamental and technical indicators of the market's health

Key indexes vs. their 200-day moving averages:

A stock index's 200-day moving average indicates the basic trend, up or down. It is generally bullish if the index stays above the average.

S&P 500 (blue-chip stocks), Friday: 1,002.60

200-day moving average, Friday: 1,066.69


Russell 2,000 index (smaller stocks), Friday: 349.71

200-day moving average, Friday: 437.72


Price-to-earnings ratio of Standard & Poor's 500: 22.08*

Based on operating earnings per share, 12 months ended June 30;

average since 1923: 13.5


Dividend yield of the Standard & Poor's 500: 1.62%

Average dividend yield of blue-chip stocks; avg. since 1923: 4.5%


Weekly new highs vs. new lows on the NYSE: 207/580

Data for the week ended Friday. More highs indicate a bullish trend.


Investment newsletter sentiment:

Stocks' near-term trend as predicted by 135 independent investment newsletters, weekly survey by Investors Intelligence. The data are often viewed as a contrarian indicator: A rising percentage of bulls can signal a topping market.

Sept. 25

Bullish: 36.2%

Bearish: 45.7

Correction: 18.1



Bullish: 37.6%

Bearish: 44.1

Correction: 18.0


Put-call ratio: 0.64

The ratio of stock put options to call options traded last week on the Chicago Board Options Exchange. Ironically, a low put-call ratio--under 0.40--can be construed as bearish because it indicates a high level of optimism, leaving a lot of room for disappointment.

* Now calculated based on operating earnings, which exclude one-time charges--so P/E is lower than if actual earnings were used.

Source: A.G. Edwards & Sons. More information can be found at on the World Wide Web.

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