JT, my model since early 1996 has been the twenties market. On MB thread, a year ago, I argued with Mike that market's going up, because I mapped July 1996 to June 1928. I also use macro money flows for an absolute point of reference, but that is very long-term in nature.
Now, according to this reading, it is Sept 3, 1929, plus/minus couple of weeks. A few weeks deviations are to be expected. The *expected* behaviour is therefore a 10 -15% correction to bottom in mid- Aug to early Sept, followed by a 5% - a week or two rally, and then start of serious slide to end at SPX = 590 - 625 range.
I conceed to Tom remote possibility of a one more intermediate rally, though I don't think it is likely. Particularly after MSFT and some other Co. saying their own stock is too expencive (has parallels to 1929 too). IMHO, the way to play it is with long OTM puts, for those with options experience, in moderation, as to limit risk, and to be mostly in cash. In view of possibility of rallies, I don't think selling lots of naked calls is prudent for most people.
What's your scenario?
Joe |
