Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Steve's Channelling Thread -- Ignore unavailable to you. Want to Upgrade?

To: GTC Trader who wrote (10456)	1/23/2001 10:17:48 PM
From: Zeev Hed	Read Replies (3) \| Respond to of 30051

Happy, I apologize for the 3150 I had late in November, that assumed we would not have gone under about 2500 by the end of the year, since then, we had two additional new lows (while the run from Nov 30th was nice, it did not go too far), Dec 20th and January 3rd at 2250, that is why my January top had to be reduced by about 100 naz points. The general scenario is the same, except that the early March low may now be under that 2200, if not, or if the fed's reduction next week, induces continuation of this counter trend longer than I expected, then the following "reckoning" might actually be worse. Here is some of the rationale: A recession seems now inevitable (I doubt the feds would have moved with such urgency if they did not see real blood flowing), I would say, thanks to Bush/Chenney for continuously talking the economy down and undermining public confidence in the economy. A recession here will bring Asia, and particularly Japan into their own problems, and Europe may follow one or two quarters later. It will require more than pump priming, to end the recession, overcapacity in the high tech sector will have to come back into balance (we are already seeing first signs with the semi-equip BTB going to 1.03 tonight). Using again the US as an engine for world recovery when our balance of payment has grown to 4% of GDP will not be as simple as it was in 1998 when it was only 1.5% of GDP. Valuations are still very high by most standards, the total market valuation is about 1.64 of GDP now (down from about 1.80 or so at the peak in March), that compares very poorly with any other bull market peak in the past, where it was at best 1 time GDP or less. At markets bottom, we have seen closer to .6 of GDP as valuation. Now, I am not expecting us to get that low here, but if you remember I have a long period (5 to 7 years) in which the market will be in a broad trading range (still 1900 to 5300 on the Naz), allowing for GDP to catch up with market valuations. If you look at some indices, they have actually hit all time highs today (like the arithmetic average of the value line and the "smaller companies" S&P 600, I believe), certainly not the end of an all encompassing bear market, but IMHO, the bubble we had, the excess in the system (consumer and corporate debts) all require a major realignment, which only an all encompassing bear market provides, IMHO. Go back to the period 69/82 and you will see a series of bear market each one taking another segment down, until the 79 episode finally put the nail into the then nifty fifty. Zeev