Roger, - Thanks for the new 1998 thread. I do not, or I should say have not, played the market from the short side for many years. I do enjoy this thread immensely, with all it's knowledgeable participants.
Your comment:
<<We could see some more upside, but I think we are very near a major market top.>>
For many number of years I have always enjoyed following the technical as well as the fundamental aspects of the DJIA. From a technical side, the Dow 30 appears very, very near a test of a top. A 1 or 2 year chart of the DJIA shows exactly where this long-running bull market stands, and it appears to be late in the 4th quarter, and may have only one time-out left. Was October the two- minute warning?
From a fundamental side, the US export market will certainly be affected by the situation in the Pacific Rim, along with difficult corporate profit level comparisons '98 vs '97. This bull is aging, as 8000-8100 becomes more difficult to attain. 4th quarter warnings, and 1-Q and 2-Q profit levels may be what it takes for the market to re-appraise it's multiple of earnings. Interest rates should reluctantly decline to the 5 1/2% area in the 1st Q (IMO). The market's imminent re-appraisal of itself could take S&P 500 from 20-22 X earnings to let's say, 15 - 17X earnings. Money flows into and out of mutual funds has been mixed (-9 bil. in Dec. period, and +~1.0 bil. this past week). "January effect" could prove to be the bull's last chance to break new ground.
I feel with patience and $$ your 1998 short selections should prove fruitful.
Happy New Year All,
Gary |
