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To: Defrocked who wrote (65763)	10/1/1999 2:11:00 PM
From: Activatecard	Read Replies (1) \| Respond to of 86076

So what happens if the Fed does 25bp? Every talking head will say the Fed is done for the year. Rally to 11k?

To: Defrocked who wrote (65763)	10/1/1999 2:25:00 PM
From: Defrocked	Read Replies (2) \| Respond to of 86076

Just for the record, I haven't felt this bearish in two years. Make sure to check the date in the following link. (Back then I still had a lot of INTC which I had purchased in '91 at an 11P/E. I also had CPQ from an 8 or 9P/E and AMAT when it was reasonable. Hardly a stock seems reasonable now. BWDIK. Also note that I was a much more considerate poster then, and was until I ran into this Thread.<g>) techstocks.com To: +Ian Stromberg (3028 ) From: +Defrocked Friday, Oct 24 1997 10:49PM ET Reply # of 8120 I would like Threaders to consider the following thoughts for the purpose of general discussion. Recent market activity has induced me to buy Jan OEX puts and reexamine my bullish outlook of the last three years. FWIW I have consistently lost money on put protection and, as such, my track record in this regard is dubious. I was, however, very bearish throughout 1987 and have begun to see disturbing similarities. My puts will allow me to remain fully invested on a cash basis with no margin. If the market returns to all-time highs I will be very happy to lose my put premiums and leave money on the table. But I advise caution here and encourage discussion in order to, possibly, return the insights I have received from the many knowledgeable posters on SI. (1) A 1000 point drop in the DJIA is not inconceivable and should be viewed as a possibility. After all, such a decline would only return us to Jan'97 levels and has happened many times in the past on a percentage basis. (2) A 1000 point drop would not have to occur in one day. But let me describe such a scenario. Sunday evening Hong Kong drops another 10% or more followed by same in Europe. A 10% decline in the U.S. is 770 points which would may have to be distributed over two days due to "circuit breakers". The overnight hand wringing could push subsequent selling even further. Alternatively a bearish trading pattern like this last week could continue for several weeks. That either situation is plausible should be cause for concern or prudence. (3) The timing of the Swiss Central Bank study on gold sales was the worst public comment I've seen since James Baker in 1987. Given market nervousness, they showed incredible stupidity releasing a report that further eroded a perceived "safe haven". Traders now are unsure if the $16 drop Friday was due to the study or to the Bank of China selling gold to defend Hong Kong. (4) Few governments have successfully pegged their currency after the market decides otherwise for them. The Hong Kong authorities may introduce further unwanted volatility into the market rather than helping it. (5) A bond market rally has resulted in a rally for stocks almost every time during the last 3 years except for this week. This suggests that profit taking and flight to quality is underway. (6) Credit swap spreads have reportedly expanded by 50 to 75 bps. or more during the last 2 weeks again illustrating a flight to quality. (7) CBOT grain prices followed the stock market on Friday suggesting liquidity concerns by speculators. (Grains ended up before further DJIA erosion at the close.) (8) Nervousness still exists over the Japan banking, insurance and property sectors. This uncertainty would be heightened by further HK declines since 40% of foreign debt in HK is held by Japanese banks. (9) I could be totally wrong and hope I am. But I have traded, observed and studied many markets for many years. I find it troublesome that so many SI Threaders are fully margined and have no cash for further allocation to obvious bargains. I cannot explain today's market activity or such low current values for AMAT,CPQ,INTC other than to stand back, revise my outlook and advise caution to so many posters that I have engaged in dialogue and enjoyed reading. (10) The purpose of these comments is not to provoke fear or panic. I am very long Tech. stocks. I don't want or mean to sound pompous, officious or crazy. And of course I run the risk of sounding like a complete fear-stricken idiot to many serious Bulls. However, my investment strategy is also long term. I bought puts because I hate giving my profits back to potentially stampeding short term investors. I had to get this off my chest tonight. I must retire now and will check replies, if any, tomorrow. Please avoid the SI tendency to shoot the messenger. I'll check back over the weekend when family time permits. P.S. I do not adhere to technical analysis but traders that do have the 200 day M.A. in sight which could be easily broken on Monday or next week. A herd of elephants could happen. P.S.S. For the market to rise I think its essential that AMAT report a great outlook and PPI/CPI are well behaved. Next Previous

To: Defrocked who wrote (65763)	10/1/1999 3:46:00 PM
From: Investor2	Respond to of 86076

Re: "The market will have to price in a rate hike expectation of at least 50/50 if not 65%yes/35%no." I agree. Re: "(2)If the Fed does not hike rates Tuesday, the dollar and the bond will get severely smacked." Conversely, if the Fed does hike rates, the dollar and the bond will probably strengthen. Re: "Anybody who wants to be long equities is already in, to the hilt." Not me!<g> I, along with many other "long term investors," have a much higher %-cash than normal. For some time now, I've been cautious on the market, waiting for that drop so I can move back into equities. Many others on SI are in the same position. Best wishes, I2