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To: Mark Bartlett who wrote (45001)	11/14/1999 11:58:00 AM
From: lorne	Read Replies (1) \| Respond to of 116753

Primary Bear Market Posted Friday, November 12, 1999 at 09:39 AM EST by Mitch Harris Reality Check Equity markets continued in their same overall pattern, with the "Dow's" high of the day registered within the first half hour of the opening bell, and the Nasdaq pushing to another new high. This continues to indicate that the majority of buying pressure is from foreigners and short covering, decisions that are generally made overnight, combined with VERY concentrated buying within the handful of OTC stocks that dominate that index. We continue to believe that we are already in a primary bear market, and the current lack of selling and rationalized speculation that inflation is not a problem is serving to revive bull market optimism. This is a necessary process to keep reviving "hope" as the bear prepares to trap more unsuspecting money. We see this as part of a bear market process. An example of this revived optimism is seen within the CBOE 5 day put/call ratio which shows that option speculators have been buying twice the number of calls as puts over the past 2 weeks. The last time this showed so much confidence was during the 16 trading days before the July 19, 1999 high, which remains the high for the S&P 500. Yesterday was the 13th day of this same type of confidence. It serves as a warning that the excitement over the divergent Nasdaq is not enough to carry the entire market going forward. This may be particularly significant going into next week's 2nd to last option expiration of the millennium as many of these excessive bets will have to be unwound. Unlike the typical Wall Street definition of a bear market today (generally -15% for the Dow), our definition is that a bear market is a process based on time to undo the excesses that a bull market creates. This includes excesses in confidence and expectations, liquidity, valuations, and time. It also must include prices progressively making lower highs during rallies and lower lows during declines. This has so far been the case for the Dow and most other market averages. Because these excesses have been built up over such a long period of time, it will ultimately take more than a few months of modest backtracking to unwind and cleanse the excesses that have accelerated to the degree that investing is now part of our culture. Resistance remains between 10,710 and 10,830, which has so far contained the advance. Support begins at Wednesday's 10,536 low, then 10,400, 10,280, 10,170 and then key support at the 10/18, 9776 low. tfc.com