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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: donald sew who wrote (27498)	9/27/1999 7:05:00 PM
From: Benkea	Read Replies (1) \| Respond to of 99985

Don: Out of curiousity, do you know what the number of total securities today is vs. the early 70s? I am sure you can deduce the reason for the question, but the new lows as a % of total securities in each period would be a good number to watch (I would think).

To: donald sew who wrote (27498)	9/27/1999 7:54:00 PM
From: pater tenebrarum	Read Replies (1) \| Respond to of 99985

Don, note also that dollar volume in OEX puts is extremely low and so is the PVI which compares current put volume with a ten-day average of put volume. i believe they reflect not only short term expectations but are also indicative of a growing belief that all corrections are temporary phenomena and serious declines or even bear markets are virtually impossible. in other words, an average annual gain of 20% in the major averages is now the accepted norm. as incredible as this sounds, this type of expectation is right now perfectly rational. this is due to the moral hazard introduced by the Greenspan Fed's declared intent to bail the market out at every bad turn it may take while leaving it alone as long as it goes up at a steady rate. i tend to agree with the thesis put forth in the Economist that the Fed should have stopped the growth of the bubble much earlier. the bigger it gets, the more wide-ranging the consequences for the economy at large will be when it finally gives way. regards, hb