To: GROUND ZERO™ who wrote (32187 ) 11/4/1999 9:09:00 AM From: pater tenebrarum Read Replies (2) | Respond to
GZ, i agree. we should at least continue higher into expiration. the NAZ and NYSE short positions were at record highs last month and the the number of open call contracts is near record highs as well. this means that short covering and delta hedging alone could drive us quite a bit higher still. what's more, the next ST cycle peak (or rather turning point) coincides with expiration day, and the FOMC does as well. i'm basically of the opinion that since valuations have long ago lost any discernible relationship with fundamentals, there is in fact no upside limit to the market based on that. this is to say that e.g. a total market cap of 180% of GDP would be equally meaningless as the current 160% (just as an example...the same can be said for most other traditional yardsticks), or to take a certain stock as an example, if a company(SCMR) with 11,5 million in revenues and 21,5 million in losses is valued at 18 billion dollars on promise alone, it could just as well be valued at 20 billion dollars. as mentioned in a recent post to Lee, the market is now driven by it's own inner dynamic, essentially divorced from reality. therefore, it can go much higher still...not forever of course, and in all likelihood the end of the bull market will be swift and will be perceived as a catastrophic event, but the limits dictated by rational fundamental analysis have been removed.
