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To: Lucretius who wrote (57565)	8/20/1999 4:32:00 PM
From: pater tenebrarum	Read Replies (4) of 86076

Luc, i believe the bearish case looks like it is in need of serious re-examination. the utilities have now run up like crazy in the last two days and they have predicted every major move in the market this year. the industrials are only a smidgen from a new high, the bond is rallying, and in the recent correction the worst that has happened to any of the major indices was a textbook pullback to the 200-dma with a subsequent violent bounce off it - that includes the dollar index btw. at the same time sentiment has turned extremely bearish, as evidenced by both the put/call ratios and sentiment polls, and last time i looked the broad consensus among advisors was that we will revisit the recent lows and whenever there is so much consensus it just doesn't happen. what's more, mutual fund inflows have rebounded strongly and the Fed is injecting liquidity like crazy. money managers are sitting on cash waiting for a dip that doesn't come, so they start buying anyway out of fear of missing the next move up. there are really only two things left that the bears can count in their favor, and that's the a/d line and the trannies. well, we're worrying about the a/d line since when? it is just not indicative of what's happening anymore due to indexation. and the transports will probably join the rally soon enough, after all the utilities have done the same already. it is also questionable if the transports still count in the same way they counted during Charles Dow's time. back then they were a growth industry in the process of a technological revolution, now they are merely mature businesses with cut-throat competition. one thing that no-one apparently expects is that we will see new highs within a week or two, and admittedly i don't expect that to happen either. using myself as a contrary indicator, that is probably exactly what we will get. time to go long or be wrong. the devil's advocate has spoken and awaits arguments that disprove any of the above.

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