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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: patron_anejo_por_favor who wrote (230235)	3/22/2003 1:49:38 AM
From: ild	Read Replies (2) of 436258

Today from Trotsky (in subdued tone): Date: Fri Mar 21 2003 12:44 trotsky (stock market) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved the massive short positions in the broader market are apparently unwound at lighning speed also...the Rydex bull/bear asset inversion is gone already...now the ratio is 18.2 : 13.7 ( bull and sector asset total vs. bear asset total ) . after today those ratios are bound to deteriorate further. will be interesting to see next week if small traders have reversed their SnP and NDX futures net short positions, but one would assume so... Date: Fri Mar 21 2003 15:52 trotsky (nabob) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved @'as soon as Steve Kaplan turns bullish, gold plummets'. that shouldn't really surprise you...he's been an unfailing contrary indicator for at least 3 years now. the fact that he's bullish ranks among my biggest worries. that said, he's probably right this time...several bullish divergences have now occurred, between XAU/HUI and PoG. all the significant lows have been made in this manner...also, the necessary ingredient of institutional buying has been in evidence during several of the recent trading days. so even if the bull in gold should be over ( possible but not likely imo ) we should get a decent retracement rally soon. Date: Fri Mar 21 2003 16:18 trotsky (stock market) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved internals and sentiment as i measure them suggest the rally is close to topping out ( 'clode' could however mean another 30 or so SnP points are still coming ) . essentially, too few stocks are participating, and more importantly, the WRONG stocks are rising. the distrust that was in evidence when the rally began ( remember? ) has all but dissipated. there's still some room for further unwinding of bearish bets, but the bulk of that has by now occurred. we are left with mutual funds that hold almost record low cash levels ( as measured by the cash-to-assets ratio ) and WS strategist allocations to equities near an all time high ( 68% ) . iow, there is no money to drive prices much further - most of the impetus for this rally has no doubt come from short covering. and all that is before taking into account the fact that stocks remain egregiously overvalued and the economy keeps imploding. watch for the inverse of the recent bullish divergences ( e.g. the Dow Theory buy signal that occurred at the lows ) to mark the next top.

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