Hi Bill, good to hear from you
>>But I disagree with you on several points:- Typically, VIX shows a relaxation of pressure before a bottom is reached... we are AT LEAST two days away IMHO before that can happen.<<
Not sure that we disagree--I suggested that we are CLOSE to a bottom, which if I had to put a time frame on--I'd say it could be a couple of weeks. I really would like to see the market break the 7600 level without going much below 7000. I think that would create the sentiment climate that is needed for a good bottom, without causing serious technical damage--the equivalent of a 15% correction. As I posted on your thread, I am looking to take substantial equity positions and I need a combination of a change in sentiment as well as optimal entry --on some quality stocks. I am not in any rush, but I just do not see what has changed so dramatically that one should avoid equities if prices come down enough, unless the interest rate environment turns hostile.
>>SE Asia is nothing and yet investors are taking it as SOMETHING! THAT is the tone of the market... <<
The sentiment shift is the thing that we need to be cognizant of-- and here I draw a distinction between -- the changes that occur because of the ups and downs of the market and those that represent a more fundamental change. I think that the changes that we are seeing at this time are the same type of changes that one has seen during recent corrections. Unlike the anecdoatal evidence that has been cited on the Big K thread, my limited anecdotal experience suggests that the individual investor has taken this pull-back in stride and shows no signs of panic. May be it is the type of people who I tend to move with--who are in it for the longer haul; not one person out of about a dozen who I keep regular contact with as to their investments, has shown the slightest inclination to shift out of their equity positions or to change their allocations into mutual funds thru their 401K. In fact, several followed my advice and liquidated into strength the way that I did in the July/August time-frame wanted to know if I was getting back into the market. If I have a regret, it is that after being 90% in cash in ealy August, I jumped the gun a bit and partially re-entered after the August correction though I felt sure that sooner or later, we would see a sharper correction. I should have paid more attention to the seasonal factors given where the market was in August.
>>and if you believe the BIGGEST bear turned bull, Joe Granville, it is the tone set by the public that is important<<
I read Granville's comments and what he said, in effect, was that the reason that he was not concerned was because the public at large had become the "smart money" for various reasons that suggested that they had somehow become more astute financially. Ironically, I agree with him but for different reasons--I don't think that it is so much astuteness but more because of their tendency to maintain the status quo as far as their investing time-table. In other words, those who are allocating their 401K funds to XYZ mutual fund, continue to do so because they do not look on this as funds for use any time in the near future--so the flow of funds into the market maintains its relentless pace. They don't try to time the markets, trade the markets or trade options or take any undue risks. Unlike in bull markets, in days gone by where the public participation was directly in the market and largely speculative at market tops.
I read on the BigK thread about people borrowing on credit cards, taking equity mortgages and so on to invest in the market. Again, I don't know of a SINGLE person among those who I am acquanted with who has done that. In fact, not one of them has even invested on margin, including, yours truly.
>>And lastly, there is probably SOME merit in what you say concerning postings to bear threads... and I have been expecting a CRASH UPWARDS and it may happen after the first of Nov after all this crap is out of the way<<
Bill, I tend to agree with you on the timing--that fits into the two week time frame that I suggested. As far as the "postings indicator", it is not surprising that it has some validity since it is an expression of sentiment and works in a contrary manner. But good bottoms, I have noticed that the threads that lean to the bullish side such as this one and the "Ideas" thread become notably cautious and almost bearish in tone--that has not happened yet but I suspect that if the market continues to sell-off we will see that.
Actually, I am waiting for OJ to preach moderation and caution and JT to rejoin the BigK thread for confirmation of the bottom:)
>>and let's hear from you now and again,
I have been posting from time to time on the Big K thread-- you mean you have not been reading my postings??!!!:)
Regards |
