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Strategies & Market Trends : The Stock Market Bubble

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To: Tommaso who wrote (1360)	8/28/1998 4:15:00 PM
From: Gwolf	Read Replies (1) of 3339

One of the saddest parts of the '29 crash were the astute investors that saw the top coming and got out before it occurred, only to get in at what they thought was the bottom. They did get a whale of a bear market rally, which was then followed by the most serious part of the bear market.It was the next leg down that killed even the best of them. The first part of a bear market is usually down hard and then a good stiff rally, it's the slow and steady decline in the next leg that does the most damage because people think they have seen the bottom and continue to hold on for sometime because they think they are buying value. It is during that second and sometimes third leg that you finally see capitulation in the market. This correction from July is not a bear market yet based on duration or percentage decline and has in no way diminished bullish sentiment, let alone shone any signs of high volume capitulation. I think people have been lulled into thinking all we need is a 10% correction over 3-4 weeks and all is well, history has proven that is a very dangerous assumption. When you can't find anybody willing to invest in the market let alone want to talk about it, then we will have a bottom. I'm here to tell you we are a long long way from a bottom. When all of the market gurus tell us that the market is never going to recover and life as we not it is over then you can safely buy, we haven't even got close at this point. By the way the bear market of '73-'74 lasted 525 days and the '29 bear lasted 813. The average bear market in this century is 414 days. The average bear market sees a decline of 31.%. The bottom line is that after 39 days and 13.7% it is 'just a little early to start looking for a bottom'. Gwolf

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