To: Yogizuna who wrote (40615 ) 6/14/1999 8:01:00 PM From: pater tenebrarum Read Replies (2) | Respond to
Yogi, interestingly, Sir John Templeton is one of only a handful of people warning of an imminent decline of some significance. Carl Icahn, who seldom comments on the market has recently made remarks in a similar vein and there are a few investment newsletter writers who mention the possibility, though most of those are perma-bears, so you would expect them to sing along. most commentators seem to be proponents of the idea that the stock market has somehow already 'priced in' the higher long bond rates as well as a Fed tightening, and that following a period of uncertainty prior to the FOMC meeting the market will be poised to take off again as soon as the tightening has graduated from rumor to fact. i am continually surprised by the amount of complacency that seems to be the order of the day in the face of a nasty bear market in bonds and the utter collapse of the internet sector. i hear everyday how oversold bonds are, that the amount of bearish sentiment among bond futures traders virtually guarantees a rebound to start anytime now and that there is no fundamental reason for rates to rise anyway. in the meantime one support level after the other is joyfully breached by a bond futures contract that seems not to care that it was supposed to change course countless basis points ago.the latest absurdity is the assertion by several internet analysts that higher rates are not bad for internet stocks, on the contrary, they are a positive! i'm sure all those poor saps drowning in margin debt will be relieved to have been apprised of this fact. all this coincides with a 12-year high in bullish sentiment figures according to investors intelligence, the poorest technical condition ever witnessed in the life of this bull market, index options traders busying themselves with trying to pick the bottom of the 'correction', and the largest one-month explosion in overall margin debt *ever* to an all-time high of $181 billion. a host of well-known market gurus meanwhile predicts targets for the Dow ranging from no less than 12,000 up to 16,000, to be reached no later than this fall. this is the ideal setup for a little downside surprise, which would no doubt help to revive this thread somewhat. of course we have to allow for the mania to get the better of us once again, but when i think of the excesses we have already witnessed and then try seriously to consider whether they might actually be surpassed by even greater excesses...i just cannot bring myself to believe it. BWDIK, as they say.
