Harry wrote--
Friday, Dec 11 1998 12:49AM ET
Hello Ike,
If timing is everything then we may set for serious retracement to double your double gggg Barbie's evil sister "Bhumboree" ggg may be coming out of the psychiatric ward with a vengeance to settle.
There has been a lot more gov't intervention in the mkts in the last six months. Hong Kong gov't propping their mkts; Several countries putting restrictions on shorting. Alan's mid-session rate cut etc...
I think Bhumboree has been discharged and this time She is more pissed off than before. She's going to wreck Barbie's leveraged technuts Party and renew concerns over blue chips corporate outlook; Technology is great but it will displace a lot of workers. Heck I can buy air line tickets, trade online, shop online and as with Pareto Efficiency, a gain here is a lose somewhere else (employment). Bhumboree's US Political Presidential impeachment affair could have more bite than 2 months ago given that you have a bunch of pissed off Republican congress "persons" leaving. Also the decisision "to impeach or not to impeach that is the question" is getting close. ggg Maybe nothing will come of it but it'll unsettle the markets as usual.
Bears shorting get a bad press but lets remember that shorts eventually provide buying power during a decline while they cover their positions and this encourages bulls to buy too since they must be the bottom or so they think; what I'm getting at is those countries that have put market restrictions on shorting will see more severe declines due to lack of buying from short covering. As an example, take a look a Hong Kong whose market has been predominantly lifted through gov't buying. How much more buying does the gov't has when actual shareholders want to bail? Everyone in HK knows that the index has been artificially lifted to 10,000; their economy is in a recession; hotels are largely vacant and filled with guest from cheap airline package deals. Credit is tight; no one is buying; real estate is down. I'm no mondo macro economist but its just from personal observation of the Region. Japan is another hot potatoe. We've all heard this before but the timing may be more significant now. mmmh DOW 9,000, all time highs in NDX, BKX hasn't really fully recovered; transports are still off... maybe its best to take the money and run than to chance another deja vu a la movie "Ground Hog Day" ggg...
Let's see the dippies come out and buy these "bargains" if this is the pullback they've been waiting for. The mkt is saying SHOW ME THE MONEY!!! and It'll show you the direction. The mkts will bounce but the declines are always much swifter. The declines we had lasts week and today's are no big deal & expected say the talking heads but as many in SI have pointed out... the market internals have been deteorating and not in step with market advances. The market needs a breather but let's watch that it's not hyper ventilating in the process gggg It's "swing" time!!! Let's use Favours as our contrarian indicator. ggg
Be well,
"Dirty & harry"
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