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Strategies & Market Trends : Stock Attack II - A Complete Analysis
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To: horsegirl48 who wrote (25689)12/7/2001 9:19:07 AM
From: Lee Lichterman III  Read Replies (1) of 52237
 
True but the war effort won't spur enough spending to equate it with the 98 tech surge IMO. I just don't see the demand out there.

I am thinking more along the lines of a blow off mini top rather than a sustained bubble. Cycle turns are due for mid December and then Spring. I figure early next year is the longest this can last. If we are above these levels in June of next year, I will be VERY surprised if not totally shocked.

After a 18 month decline, it was only natural to have a large counter trend rally. All past major recessions/depressions had them. However we never had the final wave five, the third phase of the bear nor true capitulation. Valuations haven't dropped to any where near previous bottoming areas thus I fear we haven't seen the real ugliness yet.

All that said, there has never been so much Fed intervention as now and the MZM and M3 charts reflect that. Also, never before have so many uninformed investors been active in the markets. I feel it is only natural to see larger swings as more inexperienced traders use sentiment rather than fundamentals to rule their trading.

High short interest could hold the market up short term and may even serve to "squeeze" rapid further gains however I see no true earnings growth from real demand to put a fundamental floor under this rally thus it will be doomed to fail down the road.

I won't short this yet but there will be a time and it will probably be as profitable as the previous period. It will be more fun as well as wave 5 declines are fast and furious and capitulation phases of the bear bring great pain to bulls. With the amount of denial I already see from the bullish camp, they will likely just stare in horror as the indexes move down and will be unable to sell until the bottom.

Of course that is down the road a ways still so there is money to scalp here long and short in the mean time as we await the major cycle turn later.

Good Luck,

Lee
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