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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: Lucretius who wrote (93837)4/13/2001 11:49:57 AM
From: GraceZ  Read Replies (1) of 436258
 
You are correct if what we've been going through in the last year can be accurately described as a secular bear market. What we've had has been a major correction in Nasdaq and a rising to sideways NYSE. If the NYSE now follows the Naz down we can start calling what we are in a secular bear. Until this happens I'm inclined to call what has happened in the Naz a speculative correction.

Before you blast me, according to my data this latest rally shows all the signs of being a bear market rally. It will take significantly more pain before the public is exorcised of it's desire to speculate in the markets.

Trading is a minority game. Gains in trading are made by the few at the expense of the many, as the crowd loses they are either taken out of the game or converted to the strategy of the winning minority. Once there is a majority practicing the tactics of the winners then the prospect for gains commiserate with the risk are diminished significantly.

Once you have a significant number of people playing the short side of the market the ability to make money disappears, it becomes a game of musical chairs or chicken where everyone is looking at everyone else to see who will cover first. The rally of the last few days smelled a lot like amateur shorts being burned.

Short and hold has become a sure thing in this decline. Anything that is a sure thing is a sure thing to go away, at least temporarily. You might be able to convince a lot of longs to hold to zero with some misplaced fundamental conviction, but shorts aren't going to hold when their positions move against them significantly....unless they are very young, naive and lucky.
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