<>I just want a bottom<>
Bottoms can be V, U or L shaped. They each and every one are accompanied by capitulation and revulsion. Today, institutional investor are capitulating and have been for quite a while. The retail side is still the only prop this market has to stand on. Unbelievably to me, people are still buying shares of fundamentally broken down companies that have great technologies and stalled markets. Some are still buying the sizzle, when what they should be doing is re-examining the thickness of the steak. So, if you want the sign of a bottom, look for a repeat of the action in April, 2000. Particularly the 14th and the 17th, when we hit the elevator shaft. Some speculate that the FRBNY's Plunge Protection Team came into the futures market in a big way on that Monday afternoon and staunched the flow of blood. Maybe. But we won't have put a bottom in until the stupid retail investor learns that the glory days of the NAZ bubble are well and truly behind us. I believe it could come as early as April or May, coinciding with the next "crisis" in the Western power sector. When multitudes of businesses see that the impact on their bottom line is pretty hard to bear. Then the unemployment figures shoot to the moon. Then the dislocations that have been sampled this winter really come home to roost.
To put it bluntly, Allan Greenspan had to lie through his teeth at the Humphrey-Hawkins gabfest. He felt we'd have a "V" bottom. He's either dissembling or losing his marbles. This doesn't feel anything like the little set to we had in '94. This economic climate of today is much more akin to the break in 90-1, or 69-70.
So, I don't see us making a bottom for while, and after we do, I'm not convinced that the stock market is going to be an attractive place to park funds. There's too much of a Humpty-Dumpty feel to what we've been through with the euphoria of NAZ 5100 and the subsequent headache of readjustment to reality.
JMHO, Ray |
