Strictly: Drilling II Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Strictly: Drilling II

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Frank Pembleton who wrote (902)	8/30/2001 2:55:04 PM
From: isopatch	Read Replies (4) of 36161

Looks like Dow test of Mar/Apr lows OR lower by end Sept. is in the works. Lot of things I look at are lined up like the planets in 2001 Space Odyssey when Bowman and Poole got to Jupiter!<g> 1. First warning signal to me that there would be no summer rally came as Insiders across the board evinced only tepid buying interest in their own company stocks through the Apr/May rally. And other than another minor blip up, they've sold into the strength making successively lower lows and lower highs as per the net activity chart below: insidertrader.com Here's one of the recent comments (8/15) from Insider Trader: "Insiders certainly called the market's Summer doldrums correctly...and still don't indicate that the long-awaited rebound is near. The ratio of companies showing insiders buying versus selling has been bearish for over a year now, and last week the trend continued: there were 56% more companies with Form 4s filed indicating sales than purchases. An illustation of these depressing numbers can be viewed on our Insider-based Market Indicator. Numerous market prognosticators have suggested that the worst is over for the market, and that it will recover ahead of the ailing economy. But they thought that a few months ago as well, and were proven wrong when the stats and earnings warnings showed the economy was in worse shape than they most believed. Insiders weren't fooled, though, and they are still telling us that any broad-based market recovery is not likely in the near term." 2. Sentiment continues to point to far too much complacency and lack of the kind of fear that's pervasive at important Intermediate or Long Term bottoms. Invest Intel survey out yesterday still showing more Bulls than Bears. In fact bears hardly budged from the 30%+ number in the previous weeks report! Bulls only dropped to 43.9 from 46.9% the previous week. In the several major Bear Markets I've worked in I've never seen a major low in place until Bears are 50% or higher with Bulls sinking into the 20-30% range. Another sentiment warning is the high asset allocation to equities currently being rec by the major W.S. Houses. At the bottom they will be preaching the bearish tune. They are a great contrary indicator. In other words we have A LOT more downside to go. Sentiment measures don't turn on a dime. It takes plenty of both time and price to achieve the bottom numbers we need to see. 3. The US Dollar is just beginning a Bear Market from extreme values of overvaluation when will push both the stock and bond markets much much lower. During the long preceeding Bull Market, foreigners accumulated an unprecidented level of dollar denominated assets. Believe it was Steven Roach or Paul Kasriel who pointed out that foreigners now own 40% of our Treasury paper!! As the dollar decline continues, they will come under increasing pressure to exit those bonds and switch to another currency or asset that will at least maintain a store of value role. As they exit in greater numbers, a vicious circle will develop with a impact on US fixed AND equity markets. Remember the Fed can only control ST interest rates. Intermediate to Long Term rates will stay subbornly high even with weak domstic demand for credit because such a huge %age of our Treasury market is more dollar sensitive than in any past economic slowdown! That's part of the deflationary risk the Fed is afraid of. 4. The recent continued weakness in the broad market indices is beginning to put institutions under a lot of pressure to sell with the end of the 3rd quarter barely 30 days away! The deeper we get into Sept, the greater this pressure will become. IMO we are starting the biggest selloff of the year right now. Regards, Isopatch

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next