Lurqer, quite an interesting "possible" scenario. But as you say, you should always have "few possible" scenarios. Here is another. We are in an election year, and the governing party has a lot of 'freedom" in controlling liquidity. They can win only if going into elections, the electorate "feels good". As we approach critical support levels in the averages (take your pick, 3750, 3550 on the Naz, and 10750 or 10300, the old diamonds boundaries on the Dow), the plunge pryection troops get into action (Summers buys some $20 B of treasuries in the open market etc.). The nifty 100 rally again, into elections (thus the next five weeks or more are actually not as bad), then we get an late November early December relapse and back into you Santa Klaus rally. The real fear stage, does not start until mid January and accelerate into a crescendo into February. The new administrition (whichever it is, and assuming it has smart "money managers"), decides to take the bitter pill of a real bear market as early in their administration as possible, so that the next election is not run on "the economy, stupid..." theme again, and 2002 is a good year rather than 2001. Just another scenario out of many (VBG).
Zeev |
