John Pitera's Market Laboratory Message Board

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Strategies & Market Trends : John Pitera's Market Laboratory

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To: Stoctrash who wrote (2732)	8/30/2000 11:10:41 PM
From: John Pitera	Read Replies (9) of 33421

Hi Fred, my bearish concerns, are that 1) Sept is a very bad month historically for equities. 2) the VIX is getting down to the levels of significant tops. 3) energy prices are through the roof, especially for heating oil and Natural gas. heating oil was at .50 cents last year during this week. prices eventually got close to a dollar by Jan 2000. this year in august prices are @ 1.00 and could be going to 2.50 by Jan. NG is making new highs daily and could have a still significant move ahead of it. 4) the Sept OPEC meeting may generate some very harsh language from the OPEC countries, specifically how is it that the US has not had an energy policy for this past decade. This is clearly the biggest failing of the Clinton administration. Al Gore's solution is that he welcomes higher energy prices to get the people of the US to conserve. These higher energy price cripple marginal consumer spending. the anti-market rhetoric that will come to pass from these price hikes will be very negative for the market. The EMLX air pocket may be an early feel for the fall version of the April airpocket of april 4th. the inverted yield curve and the rise in energy prices have as Ed Hyman has pointed out lead to an economic recession every time we have had this large of a jump in energy prices, and the inverted yield curve has worked 86% of the time since 1960. growth equities are not priced for this. the year after a presidential election is a down year, why not jump the gun. I have a few more concerns, such as the many stocks that are going up week after week but the momentum makes them look prime for a nice sharp sept decline. FLEX is a textbook example on a daily bar chart. there are a few concerns not yet mentioned but this is why I'm raising cash. I remember telling the piffer why I got out of ESPI and PANL (yep I was playing all those with them back then) and other stocks and said that I was going to my highest quality stocks at the start of March. I think we still have a week or so to play with and we could try to move higher into Sept. 7-8th, but this is prime fall selling season for me. John

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