good posts from bearforum== <<
<<This is a Bear Market Rally Only!
Posted By: Chartist10
Date: Wednesday, 2 May 2001, at 11:55 a.m.
I am convinced that this is a textbook bear market rally. Remember, bear rallies look
very good technically but they are marked by being very fast and unrelenting. This bear
rally is doing its job. It is beginning to look good technically. For instance, alot of people
are getting buy signals, including those on this board. It certainly has been fast and
unrelenting. It has made people very bullish and brought the shorts to their knees. This
bear market will not end this way. The capitulation that marks the end, will happen. This
rally and resulting bullishness makes a brutal capitulation even more probable. At the
end of the bear, all the bulls will be bearish. Right now, all the bulls are bullish and many
bears are turning bullish. Forget about
short-term moves, the forest is what we should be concerned about. I see the '98 Asian
contagion low as a key mark. I believe that the major averages and stocks will decline
below their lows during that panic. This would take stock like VRTS, EMC, SUNW etc so
far below their current levels, it will make your head spin. Those type of moves down will
cause the bearishness needed to end this thing. This is a brutal BEAR Market. It has
gotten no respect. It soon will. >>
<<Re: This is a Bear Market Rally Only!
Posted By: IRE
Date: Wednesday, 2 May 2001, at 8:32 p.m.
In Response To: This is a Bear Market Rally Only! (Chartist10)
Entirely agree with you, Chartist10. Like mplsbear (think I got that right . . . if not, humble
apologies!) I thought the initial leg down would probably get into the late '98 zone before
producing the kind of rally we're now seeing. In fact, it fell about 10% short and was
never accompanied by anything resembling capitulation. In terms of both bearish
sentiment and structural panic (as measured by the Rydex ratio, put/call ratios and
volatility measures) it didn't even begin to compare with late 1998, much less with 1987
or, heaven help us, 1932. It would be more accurate to say, in my view, that much of the
market never abandoned their manic delusions, despite the 65% drop in the Nasdaq.
Hence the sheer power of this rally.
Given that it didn't do so, I suspect the next leg down will be the truly brutal one --
particularly for the broader indices -- and may just slice through this support area with
comparative ease. As to when it begins, the rally has now covered enough ground to the
upside to be a respectable retracement of the Sept 1998 to March 22 1999 bear leg so
it could start at any time. Whilst a further push is of course entirely possible, I'd be very
surprised if we saw more than another 4-6% on the upside in the broader indices.
As you say, many bears are now either thoroughly discouraged or even in the bull camp
-- albeit temporarily -- so the level of potential downside support is probably lower than
it's been at any time in the last 3-4 years. As for the bulls, one can only assume that
stocks have shifted into much weaker hands in the last 4-6 weeks. Valuations remain
about as insane as they've ever been and the economic fundamentals are in my view
horrible and even in the mainstream view a little iffy. Any break in confidence could
therefore so easily reverberate between the markets and the real world in a sort of death
spiral.
No, like you I think this is a time to keep the bigger picture firmly in mind.
best regards
IRE >> |
