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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 670.92

+0.1%

Nov 7 4:00 PM EST

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To: bobby beara who wrote (72380)	3/16/2001 7:47:17 PM
From: Haim R. Branisteanu	Read Replies (1) of 99985

BB, would add that you may be correct, but the volatility index is also high which indicates to fear as people are willing to pay much more for an put option. So the analysis must be taken in this respect. Low P/C ratio at tops were happening at low volatility values - e.g. people felt that they will do better just buying the stock. My theory on this is that many already sold and they buy calls not to miss the upside and those still long are teriffied and buy protection. The dam of fear keeps substantial amounts in money markets and a crack in this mentality can flush the stock market very quickly. My sense is tha the just in time inventory cycle will move as fast up as it moved down. Waiting for the trigger. Contrary to what they wrote abotu me in the WSJ I am waiting to go more long. Bought VSH today at $18 Also it seems that the FED is quite restrictive that is why stocks are falling. No real monetary growth since February. Compare that with December January 1999/2000 stls.frb.org BWDIK Haim

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