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Strategies & Market Trends : Waiting for the big Kahuna
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To: Barbara Barry who wrote (30065)10/3/1998 11:18:00 AM
From: BubbaFred  Read Replies (1) of 94695
 
IMO, it is not high fear, but lack of the big boys (no big buyers). Big boys are in cash. Also we are in transition from the 15-20% annual gain expectations to the normal 6-10% rate of return. Small investors and most of the threads in SI are bullish and are convinced that market has bottomed.

Barrons article fails to distinguish between large and small traders. The large traders are more often correct and are not contrary indicator. I am not familiar with the quoted Larry McMillan nor Mike Oyster, nor of their track records. Did any of them called the S&P 20% correction or the NASDAQ bear market in July? Most likely not.

There are still too many people out there who keep repeating the "buying opportunity" phrase. That what makes it scarry - still too much optimism when both TA and FA indicators are bearish. Barrons article makes no sense, except the hopes and gropes for resumption of the bull market. What basis for the bull market? - global economic expansion and prosperity? If average P/E is now at 20, with creative accounting, then will be a P/E of 100 be reasonable and justifiable when the global economic expansion and prosperity begins again? If so, then it will be welcome mat for the biggest and baddest Momma of all Kahunas.

Otherwise, get ready for the biggest inflation - the late 70's-early 80's type. That will make present value of everything cheap, including all those foreign bailout loans and all other bad loans, which will be paid off with cheaper dollar. That is the reason for the present gold uptrend - the likelihood of currency crisis.
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