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Strategies & Market Trends : Steve's Channelling Thread

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To: TREND1 who wrote (28520)	9/24/2001 12:36:58 AM
From: mishedlo	Read Replies (3) of 30051

Have hedge funds covered or not? Have institutions finished forced liquidations due to fund withdraws? Those are the big questions. My GUESS is the hedge funds are still nervously short and covering will cushion huge downdrafts from here. My GUESS is the FUNDs are nearly done selling, perhaps finished selling. Anyone who wanted out had a week to do so. Possibly one or two more days down (but those could be brutal if they happen). These guesses seem to go along well with COTs starting to close S&P puts. However the COTs are not always right. Sometimes they are way early sometimes and way late sometimes but they do not stay wrong for long, and at the bottom they will be net long in general. On a 500 point drop from 3500 to 3000 the COTs were wrong (I am told). They were massively wrong on gold once before I am told. If my guesses are wrong, why can't we just plunge to proper valuations or even below proper valuation on mass fund exiting? This can easily happen if huge fund withdraws come in and hedge fungs are pretty much covered. I have not figured out how LIKELY that scenario is. We may know the answer by Wed and I expect big volatility here either way. Since I have not figured out the answer to these questions, I am reluctant to add any calls here as I earlier said I would. If we have a nice move up I will make out ok but not as nicely as those that went gung ho long. All we can do is wait. ANY good news, however, I know what happens. UP BIG. All weekend long I am simply flabbergasted by the bullishness. That too, is worrysome for the bull case. The talk is that it "always" takes years for evaluations to return to the norm after a huge bubble such as the one we were in. I look rather suspiciously at "always". Why cant we plunge straight to the norm, or even below? If fund outflows continue this dire scenario just could happen. In any case, fasten your seatbelts for some huge whipsaws cause I am sure they are coming. M

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