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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: lurqer who wrote (1576)	9/15/2000 2:37:25 PM
From: elpolvo	Read Replies (1) \| Respond to of 65232

. ,___, (°v°) ( ^ ) ¯¯¯"¯"¯¯¯ thanks woodsy

To: lurqer who wrote (1576)	9/16/2000 9:25:40 AM
From: lurqer	Read Replies (5) \| Respond to of 65232

My last “real job” was as a simulator. Perhaps that is the reason I’ve never understood why people will have a “take” on the market and put their money at risk based on that take. For me, the market is too complex for such a simple approach. I don’t have a take, but (at any given time) several “takes”. Then I let the market tell me which take is currently best by watching which scenario it tracks. FWIW, here’s one scenario that currently is of interest to me. A bear correction is supposed to have three phases: Denial, Fear (of earnings shortfalls) and Capitulation. Separating these stages are (sometimes powerful) rallies. A bear (down) stage usually has several sub-stages. For example, last spring when we were in the Denial phase, there was the preliminary break in March, April’s plunge and choppiness and eventually a final test of the lows in May prior to Memorial Day. In this scenario I’m proposing that the preliminary part of the second (Fear) phase was in the last half of July and that we are now in the more serious part of this Fear phase. Consider all of the talk about a possible “hard landing” and the dreadful effects that cost of oil will have on corporate earnings (both directly and indirectly through reduced consumer disposable income). This is classic Fear of earnings shortfalls talk. Also, note the time of the year. We’re in the third quarter earnings pre-announcement period and just prior to the fund selling period (October). If the market continues to track this scenario then a test of the spring lows will occur sometime in the next five weeks. Subsequently there can be a powerful yearend (holiday/Santa Clause) rally. The final capitulation would then take place – perhaps near the first of next year. Note that with a test of the spring lows in the next few weeks and a sickening plunge near the first of the year, the meddle of even the staunchest bull (RR?) will be tested. That’s why it’s called capitulation. The bright side (silver lining) is that after the capitulation, ’01 should be a vintage year. Now as I said earlier, this is only one of several scenarios that I’m following. I mention this one because it currently tracks the market quite well. Please note that this discussion is about the market in general. A particular stock may have already seen its low for the year. Even if we get a small relief rally at the beginning of next week, this scenario suggests wariness for the next few weeks. “Time will tell.” BWDIK ,___, (°v°) ( ^ ) ¯¯¯"¯"¯¯¯ the lurqer