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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: marc ultra who wrote (6489)	7/3/1999 12:52:00 AM
From: marc ultra	Read Replies (4) \| Respond to of 15132

Put/Call 10 day moving average is now .49, an extreme bullish sentiment reading while Investors Intelligence has been slightly below the presumed important 70% mark. Speculating on the state of Bob's timing model indicators I suspect that Bob's overall sentiment indicator may have turned close to the bearish side though a push above 70% on a 4 week moving average would likely assure this especially if mutual fund money gets hastily poured into the market on fear of under performing on this run-up. The valuation indicator may possibly also have turned bearish or close to it with rates remaining around 6% while P/E ratios remain at historic highs though his estimates for year 2000 earnings would affect this one way or another His economic indicators are assumedly positive if they are mainly aimed at looking at chances for recession though I thought I heard him express some concern about the ability to maintain economic growth in light of the acute labor shortage. Monetary gauges have likely turned bearish given the recent lack of decent money supply growth. Overall then we might estimate: 1)monetary-negative 2)sentiment-barely neutral/negative 3)ecoconomic-still positive 4)valuation-barely neutral/negative Given this somewhat pessimistic guesstimate of where his indicators stand it is appropriate to see if any or many of his 5 identified root causes of a bear market are apparent 1)tight money-I would say yes 2)rising rates-can't argue much here with short term rates raised and long term rates around 6% up from 4.75% last fall 3)high inflation-not yet but I would say rising inflation and rising inflationary expectations. This Fed is more likely to accidentally push us into recession than let high inflation exist for long 4)rapid growth-without a doubt 5)Overvaluation-could be argued if just very "richly" valued or over-valued. I would just note that at these interest rates the Fed's model shows extreme over-valuation Conclusion:now that we've reached new highs across the board despite a rate increase, a strong employment and NAPM report with increased hourly earnings and and an increased prices paid component respectively suggests market is in a precarious condition. While I won't pretend to be familiar with the details of the CIBCR I think we can agree the report also does not appear to be a positive. A cautious approach to the market at this point with the acceptance that we may need to be on sell signal watch and have our plans for proper implementation made is appropriate. This is speculation thrown out as food for thought, Bob might very well be comfortable enough with the market that he is looking to get into earnings season where strong earnings may allow some further progress. And for any visitors who can't differentiate theoretical academic discussion from reality AS FAR AS I KNOW BOB HAS ISSUED NO SELL SIGNAL AND LAST I HEARD WAS RECOMMENDING A FULLY INVESTED POSITION. Marc