     Sometimes the inter-relationships between two or more stocks can
     be very helpful when trading one or the other.
     
     In the first example, Intel and Microsoft have quite similar
     chart patterns over the last 200 trading days. This makes sense
     fundamentally, since Windows 3.0 has been the "big story" during
     that time period.  Although the program will run on a 286, it
     takes a 386 or better to really bring out the best in the new
     Windows. Looking out to 1991 to 1993, corporate hardware
     purchasing decisions are likely to be influenced by the success
     of Windows as a platform. Many 286 machines currently in use are
     likely to be replaced by 386s if Windows is successful with the
     large corporations.
     
     During the 200 days charted, Microsoft has generally had the
     better relative strength in both up and down markets. There is
     some value in watching Intel for early warning on sell signals
     for Microsoft and watching Microsoft for an early alert of a
     possible buy of Intel.
     
     In the second example, the same hold true for Von's and American
     Stores. Von's has been the better performer, so one might buy
     American Stores after Von's had an upside breakout and sell Von's
     when ASC breaks down.
     
     Now would be an appropriate time to look for similar
     relationships in the oil stocks. One possible way to categorize,
     initially, would be to tabulate the percentage of natural gas
     holdings vs crude oil.
     
     
     
     8/31/90                                          J. Tepp
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