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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: AllansAlias who wrote (26669)10/11/2000 9:28:50 AM
From: Perspective  Read Replies (1) of 436258
 
Agreed. I believe that we set the days' low almost immediately. Thing to remember here again is that fund flows are everything. The public hasn't yet responded to the bad news. You'll get a response in anticipation of their moves, but the fund outflows will come over the weekend. Guaranteed people like my Mom are sitting there going "Well, I'll see what it does. If it hangs in there, so will I. If it goes down, I'll take some chips off the table."

Of course my Mom won't be doing that, since I did manage to talk most of my family out of the market.

The *big* melt comes after it becomes clear we're in a bear market. Capitulation early today, people trying to pile onto the short side, then snap, we'll rocket back up and the test will appear successful as the amateurs get smoked by those of us who saw this coming. But it will be like the "ka" in "ka - BOOM", as the BOOM hits in the next few days in the form of mutual fund redemptions and margin calls that can no longer be met with cash.

And you're right, this should be clear in the SPX response.

[EDIT: The positive feedback is *fully* engaged now, but I'm guessing it has a lag of at least a few days. I will be covering a good chunk today, but plan to remain at least 60% invested. However, I expect to be reinvesting in my shorts by the close.]

BC
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