The Epic American Credit and Bond Bubble Laboratory Message Board

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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: Crimson Ghost who wrote (54765)	2/26/2006 5:08:51 PM
From: Rarebird	Read Replies (3) of 110194

This market can break at any moment. It may be tomorrow or it may be in a couple of weeks. But break it will. It is the calm before the storm here. The RUT has become a speculative index for momentum traders. Even those who say "it's beginning to look a lot like February 2000" are recommending a long position therein: schaeffersresearch.com I continue to see lots of negative divergences here, the most apparent being the failure of the Nasdaq to confirm. Regardless, the resolve of those long may not be satisfied until a new 52 week high on the S@P 500 is reached. Upside looks very limited from these levels while downside risk is huge. I have the ratio of risk to reward about 15:1 here. I'm continuing to scale into shorts here on rallies. In a way, I'd love to see these markets rally another week or two. I know who is buying here: the naive money that never learned its lesson in early 2000. "It's always different this time" and the next time after that too. But money flows into stocks don't lie: Schwab receiving massive inflows of $$$ into mutual funds last seen in early 2000.

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