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Strategies & Market Trends : Tech Stock Options

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To: donald sew who wrote (49841)	8/13/1998 5:58:00 PM
From: FJV	Read Replies (1) of 58727

We have not seen a close in the SPX below its 200 day MA since July of 1996. The world was a far less economically treacherous place (or so we thought) 2 years ago, and the American public had more equity in their homes than in their stock portfolios. It is very likely that the SPX will violate the 200 DMA in the next few days. This is a very perilous juncture for the many who have become so psychologically wealthy over the past few years. When the complacency is replaced by fear on Main Street, the downdraft will probably be severe and the reflex rally will be nearly so. The operative word is nearly. The worm has turned for now. The excesses, real and psychological, will be wrung out of the rest of this market as they have been wrung out of the RUT this year. When the distribution phase is finally complete and the last 401k $ has been reallocated to money markets or bonds, it will be time to go long again. By that time, China and Russia will probably have devalued, HK will lose its $ peg, the Hang Seng could see 4000 and the Nikkei 12000. The bright side is that you'll be able to buy a VCR for $39. John Q is in for the ride of his life. JMHO BWDIK Franco

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