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Strategies & Market Trends : MDA - Market Direction Analysis
SPY 659.03+1.0%Nov 21 4:00 PM EST

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To: CharlieChina who wrote (76833)5/11/2001 7:02:21 AM
From: s berg  Read Replies (2) of 99985
 
Nicholas Gates what is the info source for your indicators.
They all make sense. But when you say that institutions started buying treasurys May (c/w seasonal pattern of earning season rallies followed be declines) is that from trim tabs. Likewise insiders buying early April, is that from CBOE tracking futures contract purchases. Just guessing where you get your info.

Also agree about potential for "Perfect Storm". With current levels of poor liquidity, volatility spreading from Nasdaq to S&P I think you have growing risks of both buying and selling panics. What happens when the volatility wave hits 401k investors. Haim is correct to emphasize this vulnerability. For example, government employees can move their index funds into bonds but there is at least a one month lag from when they decide to shift. Makes one wonder how, if people pull money out of 401ks, the government retirement plans implement the change, i.e. do they pull the money out at once at the end of each month.

I believe there is a risk, hard to quantify with conventional TA, of a one day 87 like or worst watershed decline in S&P. If anything, contrary to conventional wisdom, the current sharp rally, by increasing volatility, may increase the risk of a massive drop.
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