SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : The Millennium Crash
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Arik T.G. who wrote (553)9/2/1997 12:13:00 AM
From: Rarebird   of 5676
 
Arik, I don't follow your reasoning at all concerning the S@P pulling the Russell down or the Russell lifting the S@P up somewhat by Tuesday. One thing I think we can all agree on here: There is clearly a Divergence in this market: The Dow and S@P are getting slammed while the Russell 2000 is hitting all-time highs! Why can't this divergence continue for a while longer? It happened in reverse a while back and that divergence went on for quite a while. The argument for a small cap speculative blow off to end this bull market is not inconsistent with what's going on right here and now. To get this type of blow off, investors need to lose all confidence in the Blue Chips. With the pre-announcement by Coke and Gillete, this process got underway. To complete this loss of confidence in the Blue Chips, investors will need to see a 20% decline in the S@P while the Russell remains flat or trends higher. What's gonna happen here is that after this leg down amongst the large caps is over, investors are going to throw most of their money at the small caps. And why shouldn't they if the Russell continues to make new highs while the Blue Chips get crushed? Plus, the A/D line has made no new lows here and is still in Bullish territory. The smart money, I think, is shorting the S@P ( or buying puts ) and going long the Russell 2000 ( or buying calls). In short: this divergence has Extremely Bullish Implications for the Small Caps in the fall.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News