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Strategies & Market Trends : The Millennium Crash
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To: Oracle who wrote (3192)8/16/1998 9:46:00 AM
From: Rarebird  Read Replies (2) of 5676
 
We are definitely in a Bear Market here. The only questions are how low we go and how long it will take. The questions are basically speculative in nature and depend upon certain evolving factors such as the Asian situation and corporate earnings. My view is this: Although the market may rally on Monday after Clinton gives his testimony, this market wants and needs to go lower short term. I see a lot of support at the Dow 7800 level and S&P 980-1000 level. I think from these levels we can have a Bear Market or Suckers Rally up to the 200 day moving average at about Dow 8450. At that point, we will reverse and head a lot lower to around Dow 7000 ( intraday perhaps a 100 to 150 points lower ). What happens after this is a little fuzzy to me. I'm not convinced that the Bear here will wreck more damage than a 25% decline. I do think that Greenspan will take swift action on lowering interest rates and Rubin will take swift action working with the Japanese and Chinese bureaucrats to remedy the economic crisis. Japan will ultimately have no choice but to initiate massive tax cuts after the Nikkei falls below 13,000. To compare the Japanese bubble in the late 80's with the bubble here in our stock market makes very little sense. At its peak, the Nikkei was selling for 80 times earnings. At the peak here in July, the S&P was selling for 28-29 times earnings. With Greenspan and Rubin taking swift action, I just don't see the massive decline that perma Bears like Prechter and Arik are calling for coming true.
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