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Strategies & Market Trends : Zeev's Turnips - No Politics
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To: limtex who wrote (31984)2/21/2002 8:07:01 PM
From: t2  Read Replies (2) of 99280
 
6-8 becasue it reflects a valuation that takes account of a massive walkaway by investors many never to return. So less demand for stocks

Exactly my thinking about individual investors.
We have seen momentum markets of the past. To me the September low was just another "buy the dip" opportunity on very richly valued stocks. A once in a lifetime opportunity to get bargains.

To me we are approaching or at the walk away stage. If this is in fact happening, I fear the momentum will be more than one can see in the charts...at least the September lows; beyond that I have no real idea.
The big catalyst for the severe drop is a sudden realization that there won't be a pick up in demand that justifies valuations.
That sets the stage for a crash scenario, imho.

Hopefully, short interest has gone up significantly in February and that might help in the near term. I am not really bearish on lower PE stocks (including a few techs) but if the Naz was to crack, I don't think they will be spared. However, note that their managements would be in a better position to buy back stocks and hold up the stocks.

Still long a lot including tech but using puts to hedge as well. With a low VIX, VXN, makes sense to pick up cheap puts, imho.

jmho.
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