MM:
Like every other professional short out there, David (who I am honored to say is a friend of mine) is suffering as a result of being both intelligent and intensely analytical. Not that it requires much intelligence to label this current insanity as the greatest mania in history, nevertheless, what worries me sick is that as the shorts capitulate, the "cushion" beneath this situation is disappearing. Like every other mania, this one will end when all the dollars have been sucked in and the buyers finally reach the point of exhaustion. With the shorts virtually extinct, there will be few bids to stem a vertical descent.
Earlier, I expected that if the market exited October, we would experience a relief rally that would carry us into the new year. Now, I am not so sure. This current madness is just so violent, that all bets are off.
Meanwhile, Y2K approaches. I personally believe that the Fed is flooding the system with liquidity to literally float us past this particular event. The irony of the situation is that this action, piled on top of all the past excesses, may actually be providing the gasolene for the final blowoff.
This one is shaping up as a flight through a thunderstorm.
Best, Earlie
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