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To: SliderOnTheBlack who wrote (64694)	4/16/2000 8:45:00 PM
From: Roebear	Respond to of 95453

Slider, Great post, "emotional selloffs" make PE's and a lot of other things FA and to a lesser extent TA meaningless! While this may have started as an emotional reaction to inflation news, it may end as a margin call driven monster. No certainty here at all, just caution, as the damage is deep. A few observations on other segments of your post: ** "It's going to be interesting. Actually - unlike the Russian & Long Term Capital triggered crisis of 1998; there is no real market event here. I dont know where the NASDQ, or the DOW bottom at - I am not following those indicies that closely; but - I would not be surprised to see strong buying and a huge bounce that actually starts monday." ** In recent (and Timely!) release by Robert Shiller he notes in his book "Irrational Exuberance" that major market moves are often NOT precipitated by any substantial news. Sometimes there is a piece of news, like the CPI Friday, that begins a large market move but it is often quite insufficient in and of itself to cause the amount of movement that occurs in the market. Even more often there is no major news to link to the market action and quite often major news items create no market movements of note. This comes from a study done cross checking 432 major news stories with stock prices over a time period from 1950-1966. This study was done by Victor Niederhoffer when he was an assistant professor at Berkley in 1971 (p 75-77 Irrational Exuberance). I found Shiller's telling of the news surrounding the 1929 crash as chillingly deja vu, there was no news of substance except a week before a sudden violent drop and then nearly complete recovery(-12.9% recovering to -2.1%, ibid, p.86), in one day, Black Thursday October 24, 1929. Otherwise there was no news of any substance surrounding the Oct 29/30, 1929 drop. That section was a shocker for me, I had been thinking of market drop and recovery April 4 as a practice dry run for the real thing, but had forgotten about Black Thursday 10/24/29 and the lack of news surrounding the 10/28-29/1929 crash. Shiller does a good job of debunking Smoot-Hartley as a substantial news item then, BTW. Another quote from your post: ** PS - anyone else looking to see how high GOLD & Gold Stocks go - as a barometer on how severe this sell off might be ? ** Absolutely, though there is little doubt in my mind with the comparative small size of the gold market and the opportunity to trade in relative anonymity or via PPT proxy makes gold a manipulated market and one they will make every attempt to hold DOWN! IF it takes off it means great damage has been done and they either cannot contain it or the PPT minions themselves are jumping ship into the golden lifeboat. IF gold does not move, the floor for gold stocks is so close as to be a mere step down rather than a three story fall offered by many other stocks or hedges. After all, 48 marks a multi decade low in the XAU and also the area where a bounce is as close to technically guaranteed as can be. The sentiment, as marked by the volume and price reaction in most gold stocks, is also overwhelmingly bearish. A contrarian delight! Reminiscent of several of golds recent up moves. The whole gold story also reminds me of a section of Shiller's book (I was obviously impressed) where he studies market indexes and notes a good correlation between 5 year moves up correcting down and 5 year moves down correcting up. (I am oversimplifying here, he is talking indexes and there is neither space nor time to do it justice, but oversimplifying again, I think it would likely apply to sectors also) In short, April 4's quick little upmove in gold during the quick little one day drop and recovery could also have been a dry run "practice". (Now you know I should have had the lead in "Conspiracy Theory" instead of Mel Gibson, gggg) In any case, I began to do on the open Friday what you propose to do, sold off my worst oil prospects, kept the best and went 30% gold stock. Wish me luck, as I do you and all on SD thread! Best Regards, Roebear