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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: HairBall who wrote (61068)	10/20/2000 10:09:31 AM
From: Les H	Respond to of 99985

Will Greenspan Ride to Wall Street's Rescue? businessweek.com The concentrated indices (NDX, OEX) are getting overbought short-term so I expect another pullback.

To: HairBall who wrote (61068)	10/20/2000 11:05:57 AM
From: Crimson Ghost	Read Replies (2) \| Respond to of 99985

Don Hays argues that this phase of the bear IS NOT OVER YET. The worst lies ahead. Close ahead. "I would like to say that I don't expect the market to do much next week, but that would be totally wrong. I expect an extremely volatile period, and despite the very high put/call ratio that was flashed on 4 of the last 6 days, I believe that the prior period of sharp weakness will probably return, maybe even today. You should be able to tell if I'm going to be right very, very soon, because if I'm right these temporary "bounces" will last no longer than just a few days until we finally get an extreme of selling pressure, which has not happened yet. As we showed in our Wednesday's report, the Arms index, which is very effective in measuring the amount of real panic selling, has not even begun to experience any significant change yet. The 10-day moving average almost always moves to at least 1.30 on any significant bottom, and as of yesterdays close it is still under 1.0. And one big "fly in the ointment" in my opinion, is that even though the very reliable equity put/call ratio has given a "high-fear" buy signal, it is only one of our psychological indicators. I never trust just one indicator, no matter how good it has been in the past. That is why our psychological composite is based upon a basket of indicators. We have recently included in that basket, a survey that is done by American Association of Individual Investors. It has been very good at spotting short term "turning points" in the market. So when I review this component, I see that even though the equity option traders have thrown in the towel, the public investor has become even more bullish on the sell-off of the last 10 days. For instance, in the latest results released on October 19, 2000, the bullish sentiment amazingly moved up to 49% from the previous week's 41%. At a very minimum, I would expect the bullish sentiment to fall to 25% before any meaningful fear attack is legitimate. The bearish sentiment survey showed the same amazing results, as the percentage of bears dropped from the 32% of the previous week to only 24% this week. Once again, at a minimum I would expect this to increase to 50% before a meaningful short-term bottom can be forged."