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Strategies & Market Trends : Stock Attack -- A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: JRI who wrote (37052)	12/2/2000 6:47:40 PM
From: timers	Read Replies (1) \| Respond to of 42787

Why on earth are you looking for the vix to skyrocket in relation to the nas selling? The mistake everyone is making is they are looking for further selling in the nas because of the recent vix levels and put call ratio. What does that have to do with the price of tea in china in relation to the nas? Everyone is expecting the nas to go to 2200s because of the broad market indicators. Why are you doing that? The only way imho that the vix skyrockets is if the s&p tanks. If it does it is more than likely imho that the nas is the one that skyrockets in the ensuing sector rotation. Nobody seems to be relating the proper indicators to their proper places in the market as a whole. It will be what causes them all to miss the bottom while they all wait for what they all hold as an anticipated bottom in the 2200s due to many reasons...one of which is watching indicators of the broad mkt and applying it to the nas. I personally see incredible bearishness on the nas right now and they all seem to point to a lower target in the 2200s for a bottom or a mid term bottom. The "common" buy bell so to speak that everyone waits on to ring at the predefined bottom usually never seems to ring. Then they seem to have to hurry to get back in higher when they probably should be gettin back out. But right now they all seem to have sold out to wait for the 2200s. In this selloff we have just had, a nas vix if there was one would probably have been well over 60. But everyone seems to be looking at a broad market vix among other indicators and waiting on them to hit certain levels before they begin to buy the nasdaq. ??? I definitely see fear of being long the nas right now and right here from the 2500's. The bottom is no longer generally being seen as "maybe now" but rather "in the future"... and down lower. imho. Thoughts?

To: JRI who wrote (37052)	12/4/2000 11:03:41 AM
From: Paul Shread	Respond to of 42787

JRI, This may sound funny, but I was bullish back in 1998. I thought as long as we didn't slip into deflation (which I set at CRB 173), that lower interest rates and commodity prices would ultimately be bullish for U.S. stocks; the whole meltdown never hit any world markets of consequence, IMHO. All it did was produce the last values you would ever see in stocks like CSCO. Obviously, a panic is never good, and easily could have spiraled into much worse, but the fundamental problems were outside the U.S. I said all this at the time, and put my money where my mouth was, as some here can attest. That said, the fundamental problems this time are within the U.S., and therefore much more real, but also much more manageable, because we're talking inflation and an overheating economy, or at least the threat of such, which this Fed seems to know how to deal with. So we could be in for an old-fashioned bear market, but that will end eventually. The wild card is the bursting of the bubble in techs and Nets; how much lasting effect that will have, I don't know. It's a significant portion of the U.S. economy, so is there enough strength elsewhere to suck up the bubble bursting? I don't know, but the bubble was definitely on a par with the Nifty Fifty of 1972 or RCA of 1929; most of these stocks will never see their old highs again. There's something in the real economy behind the bubble - the buildout of the Internet and the efficiency benefits of technology, but like all bubbles, the underlying values and assumptions got out of whack. Obviously, the fundamentals of the U.S. economy are better this time than either '29 (1/3 on margin, banks failing at a rate of 2 a day even during the boom) or '73-'74 (the primary problem there, IMHO, was a very weak Fed that forced the government to rely on ridiculous steps such as wage and price controls). I guess this is a long-winded way of saying that I think the problems are worse than they were two years ago, and therefore won't shakeout overnight, but I also don't have a clue of how bad it's going to get, and no one else does either. In trendline theory, when a bull market goes parabolic, it's nearing the end. We've been on a parabolic ascent since 1994, and probably since 1990 in techs, as you point out. So far, we've broken the 94 logs in the INDU and SPX, but not in the COMPX, where the 90 log is around 2300-2400. Will that break? The charts tell me we're headed for 2200. The main technical question I can't answer is what is the satisfactory technical outcome of those lines breaking? I don't know; do we need to reach a more sustainable trendline, like the 1984 logs, or can we just go nowhere for some time? Are the 94 linear trendlines a satisfactory support, where we stopped selling on the Dow last month, even though they would imply diminishing long-term returns? Can we form new trendlines off whatever bottom develops? I really don't know where we're headed, so I'm watching each pattern as it develops. The patterns at the moment tell me we have more downside ahead, but the Dow seems to be doing everything it can to confound that opinion. I should add that the market looks interesting here: a low-volume retest of the COMPX bottom, with fewer new lows. A promising point for a rally.