Waiting for the big Kahuna Message Board

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Strategies & Market Trends : Waiting for the big Kahuna

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To: Bull RidaH who wrote (23024)	8/2/1998 11:32:00 AM
From: Philipp	Read Replies (2) of 94695

David and other bulls: Do you really think that after a dip to 1075 (SPX) the bull will return? A 10 % drop can hardly be called a proper correction after the typical recent annual increases. The market looks very tired to me and the Goldilocks scenario is starting to crumble (see decreasing earnings growth). I think that the market is overdue for either 1. a proper correction (30 - 50 %), followed by an extended flat period, or 2. a mild crash (50 - 70 %), followed by a sharp rebound. I think the Fed's recent statements are designed to try to prevent 2. by taking some of the air out of the bubble. Greenspan is a wise man, but even he may not be able to prevent serious panic selling at some point (note how he praised the retail investors for their buying on dips; clever move). I am not predicting that either 1. or 2. is imminent. It its safer/more profitable to go with the flow for the moment (i.e. go short-term long when it bounces at 1075), but being prepared for 1. or 2. (or 1. and 2.) nevertheless. Good trading, Phil

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