<<Maybe you can elaborate a little more on what you've found out.>>
All I can tell you, chic, is that I have studied all the commodity charts for which the activity of commercials is reported (which includes financial indexes - such as the S&P, bonds, currencies and the more traditional commodities such as grains, metals, meats etc) back through part of 1996 and 1997.
... and when the commercials are heavily long, the prices in those markets usually go up significantly ... and when the commercials are heavily short, the prices in those markets usually go down significantly ... by usually, I mean about 90% of the time ...
... however, I have not seen another situation where the commercials were as short the S&Ps as they were last June and July ... AND YET they have gotten progressively more short almost every week since then (except for the last two weeks) ... so despite the fact that the S&P 500 Index (which, you must know, is closely aligned with the S&P futures) has corrected 24% plus (as of yesterday) in the last 12 months, the bottom is not nearly in sight ...
... what does it mean? ... to me, it means that the commercials would not have gotten as short as they are if anything around S&P 500 1150 is anywhere near the bottom ...
An S&P 500 at 800 to 900 is more likely ... and a DJIA at 7500 to 8000 ... and a Nasdaq Composite of 1200 to 1500 ... in other words a serious market crash that will not recover quickly like 1987 ... the worst financial event since the 1930s ...
... is my interpretation correct? who knows? ... but so far (since January, 2000), I have been right on target ...
... "The Economist," the ContraryInvestor, the economists at Morgan Stanley Dean Witter, Bill Fleckenstein and lately even "Business Week" is starting to agree with this scenario - not they have quantified their numbers as I have ... God forbid that they should be blamed for such a event ...
... but I think the signs are all there for anyone who decides to spend the time studying all of this ...
... I believe equities will crash by the end of October, 2001 ... there I have said it directly ...
... more importantly, am I correct ...
... I truly hope not, as many will get hurt, whereas I am prepared to change my investment strategy very quickly ...
Disclaimer: The above is my personal opinion. I recommend that you do not base your investment decisions solely on any one person's views or analysis (including mine). Do your own research and take personal responsibility for your investment decisions.
Ken Wilson |
