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Strategies & Market Trends : Guidance and Visibility
AAPL 255.48-1.1%Jan 16 3:59 PM EST
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To: 2MAR$ who started this subject5/4/2002 7:29:09 AM
From: kendall harmon  Read Replies (1) of 208838
 
Price Headley in Barrons today, painful reading:

Q: Where are the opportunities now? Let's talk broadly about the market.

A: The problem with this bear market is that we have seen investors exhibit hope all the way down. It's a classic "slope of hope," a term coined by Bob Prechter. In every little rally on the way down, people have assumed the market has bottomed and it is safe to go back in. This hope factor prevents the market from truly bottoming until we see the kind of climax we saw in September. We need to see another one of those before we get to another great buying opportunity, and it is going to be a while. We've seen some really negative things the past couple of months. For example, the CBOE Volatility Index, the VIX, touched an extreme low in the past few weeks of 18.77%. That tells us we are in for a two-to-three-month downtrend. In the week ending March 22, the VIX got down to just under 20. While it went a little bit lower the next week, the market still didn't go any higher. This concerns me because typically a lower VIX reading would be accompanied by higher stock prices. However, in this example, we didn't see higher stock prices. The Nasdaq was at 1851 on a closing basis at that point and it has continued lower.

Fear is just starting to rise. But we are coming off such low levels that we've got a ways to go before we get to a true extreme in the level of fear that would point to more bullish times ahead....
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