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Politics : High Tolerance Plasticity

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To: energyplay who wrote (1566)	3/14/2001 9:44:10 AM
From: russwinter	Read Replies (1) of 23153

Normally this might be the point in time (if we are down 5% or more today) when I might take a shot at the long side. Look at margin debt. This is through January and you know a couple tens of billion more has been liquidated since. It's now more normal in relation to stock capitalization. So the speculators are wiped out. Also seeing the bears too cocky on chat lines of stocks I've been short. Covered my SCH short at 16.20 on Monday. Too much put buying as well. dismalscience.com But in the intermediate term, the thing that has amazed me so far is how little Joe and Martha Public have sold (they quit buying and are just flat). There is also very little cracking in the faith in Oz (Greenspan). There is a sense he can save the day. In sum, I think today will mark the bottom of this leg (if we get capitulation action: defined as high lopsided down volume, down over say 6%, I don't want to see a close on the high however)and that a 20-25% bear market rally will ensue. That will be followed in a few months by another dip and retest (and probably a failure) of the lows today, and a gradual drawn out (a year) Joe and Martha liquidation phase between 1400-2200 Nasdaq and 800-1050 S&P (has some catching up to do given overinvestment in index funds). The dangers are the overshoots below that, and those would be historic buying opportunities. Very wild and dangerous phase. I'm loaded with PM stocks (you can see why on Gold Monitor thread), so I'm staying clear of both the long and short side now. Good time to lose money on both. I'm interested in buying Japan when some of these big banks actually collapse. I will pick up longs at the low end of ranges noted, and on overshoots. Right now (other than PM's) am only long some NG and oil (primarily Canadian: CED, PEL, AXL).

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