bobby, I am not so sure if I am right, but I am following the scenario I described here in April last year, actually, apart of the completely unforeseen November indecision and the subsequent more rapid than necessary decline in confidence, it evolved pretty close to "plan" (well, the "plan" did not include an excursion under 2950 in 2000, "only" in 2001, got to miss few...<g>). I do agree with you that January was a bear rally, resulting from both internal parameters (seasonality, liquidity flush and oversold condition late December) and the "urgent" cut by the Feds. If all we are in is an inventory correction, than by the end of this decline, we might be ready for a good lengthier period of up market. I fear, however, that we may have more than an inventory correction (consumer confidence is getting lousy, this coupled with consumer exhaustion could sharply impact end aggregate demand) then, we may have a stage of Chinese torture, and only at the end of that period a final clean up. Right now, I lean to only an inventory correction this time. That is actually not that good, because the stimulus (both monetary and expected fiscal) will overshoot drastically, forcing down the road a real tightening. The year is young, a lot of excitement ahead.
Zeev |
