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Politics : High Tolerance Plasticity

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To: jim_p who wrote (175)	2/23/2001 3:39:01 PM
From: JungleInvestor	Read Replies (2) of 23153

Interesting points in following post on why this is going to get nastier. DOW will not remain at this bloated level and its slide will further undercut the Naz. Re: cw-ot,re:firesale by: cybeur_wolf (33/M/Los Angeles, CA) 02/23/01 03:12 pm EST Msg: 47310 of 47310 I don’t think predicting against a Nasty1900 is sticking your neck out any more than predicting for it. There’s probably some merit to your weekend theory but my additional negativity comes from three main things 1) I don’t weigh the VIX too heavily as a factor on the NAZ since the VIX is derived from OEX DOW index futures. I look more to the put/call ratio which got only as high as .82 last friday and is only in the low .70s now. I would like to have seen a higher, more bearish p/c ratio to give a stronger signal to a bottom. 2) Forced selling still to come. My broker lets me know what’s happening around his firm and there’s plenty of margin calls out there on accounts and traders that are about to get douche’d out. I’m only privy to a statistically insignificant sampling of account status, but I think it’s a reasonable conjecture that many traders have followed the Nasty and lost 30%, on full margin that puts them into 60% losses minimum but typically would be worse because they likely used margin to pyramid. Flush! 3) commercial, not retail DOW futures traders are short the DOW like somewhere off the friggin map. Pick any of a dozen macro-economic reasons that could easily adversely affect the market and the economy and you’re going to see some serious pain on the DOW someday. DOW 10K is almost as bad a joke as Naz 5K was. Look at the 5 day on KO, that’s just the beginning. It’s a P/E 65 purveyor of sugar water Ponzi’d off as a “safe haven/defensive stock” darling of the DOW. When energy, war, inflation or trade deficit combined w/ further rate cuts devalue the dollar, artificially inflated during 8 years of Clinton manipulation to fake a strong looking economy, look out below. The Naz can’t live in a vacuum and survive a major DOW correction even though it has already been assiduously punished. Those commercial DOW futures traders never lose. Remember that.

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