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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 662.63

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Nov 19 4:00 PM EST

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To: pater tenebrarum who wrote (45018)	4/4/2000 8:58:00 PM
From: michael r potter	Read Replies (2) of 99985

Today was a mini- washout [panic] among the inexperienced fund managers and the over-exposed and leveraged hot money. There is always plenty of cash available to buy dips at some price point. The decline was stemmed not by orchestration I believe, but simply prices getting at least temporarily low enough to make it compelling to step in front of the freight train. [It got some of mine]. Once it stopped declining, that was the signal to others who have been waiting to buy this rather large dip as investors/speculators know how sharp rebounds will be. What today did not do was involve the average person who has poured money into funds-especially tech. funds the past 3 or 4 years. Those people are mostly working regular jobs during the day and while aware of the damage, the overwhelming majority probably did very little. It will take more to erode the confidence behind that much larger pool of potential selling. When that happens and it will sometime in the future, we will be at the stage of real bargains and capitulation-not just temporary bargains and a whole generation will once again forever swear off investing in stocks. Today was but a sideshow to them. It is amazing how many think of this as a game instead of a serious venture where lives and families are ultimately at risk because of irrational and foolish behavior. How many families are paying the price tonight for totally margined bread winners in no earnings tech. and net stocks-that just imploded with the multiplier of leverage. Margin should be banned for the novice. Yet, you can't protect people from themselves. thanks, Mike

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