Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: tradermike_1999 who wrote (8316)	9/6/2001 4:30:40 PM
From: KyrosL	Read Replies (5) of 74559

Everybody seems to be expecting a large bounce after a test of the lows. But: Mutual funds must sell their losers to offset their cap gains before end of October. They also must satisfy rising redemption pressure. Foreigners may stop buying US stocks following the recent dollar swoon and may even start selling some. Insiders continue selling. Large convertible issues are coming to market, increasing permanent short pressures. Many shorts have covered during the recent swoon and eagerly await any bounce to reload. Value investors have retreated to cash and bonds and wait for valuations to reach reasonable levels at around half of current prices. I wonder who is going to be doing the buying during the bounce.

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