Strictly: Drilling and oil-field services Message Board

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Gold/Mining/Energy : Strictly: Drilling and oil-field services

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To: Archie Meeties who wrote (89968)	4/12/2001 9:57:57 PM
From: BigBull	Read Replies (5) of 95453

Why this current rally will fail. Stipulations: 1.) This is a bear market. 2.) Bear market bottoms require more extensive proof of finality than intermediate bottoms in overall bull markets. 3.) 1 and 2 therefore indicate a broader and deeper set of filters should be utilized by the investor before committing his cash to anything but the most ephemeral of long side trades. As I have already published a list comprising a set of indicators that I consider robust, I shall not belabor the point, herein. However, I do wish to call attention to mutual fund cash levels as they will clearly indicate lack of true power behind this rally: comstockfunds.com Equity mutual fund cash is still only 5.6% of assets, in the low end of a long-term range of 4 to 12 percent. Bulls still handily outnumber bears in the Investor’s Intelligence survey. Merrill Lynch’s tally of Wall Street strategists show them with their highest equity allocation ever, while ISI’s survey of professional portfolio managers indicate near record exposure to stocks. It is indeed odd that the majority of investors are bullish, yet think that everyone else is espousing doom nd gloom. In addition the extremely high market valuations we have been emphasizing in recent comments are themselves indicative of the highly bullis attitude that still persists in the current market. All in all we still believe that a major market meltdown is in store. ------------------------------------------------------------ At the very least, one would expect 9% cash levels to signal a true market bottom. Not even close. The power derived from high cash levels simply is not there to drive a major move. It is a matter of market mechanics now, not simply rates.

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