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Strategies & Market Trends : Waiting for the big Kahuna

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To: John Dally who wrote (4801)	9/8/1997 9:25:00 AM
From: Arik T.G.	of 94695

John, Better late. You said on 8/31: Wouldn't it be fair to use the NASDAQ as a proxy for small caps in '87? Back in '87, MSFT and INTC were still in diapers, the grown-up companies were listed on the NYSE. The main Q is indeed timing. It is widely agreed on this and the crash threads that the market is ridiculously high. Many (including myself) think that the crash is around the corner. Others (Rarebird sounding that view most loudly) claim that this bubble has yet to expand, with small caps taking the leadership. The argument is that the market cannot fall as long as the Russell 2000 keeps reaching new highs and/or breadth #s are that good. Looking at the NASDAQ chart since '87, which, to answer your (rhetorical?) Q does simulate quite closely today's Russell 2000, It looked to me that the crash came within just two weeks after NASDAQ new high, but here home.sprynet.com I counted 37 trading days seperating between Dow's last new high and the crash. My conclusion- new highs in mid/smallcaps do not decrease the possibility of an impending crash. A daily record of NASDAQ rates on the three weeks before 9/19/87 would be appreciated. ATG

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