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

To: Stephen M. DeMoss who wrote (69390)	2/17/2001 2:10:15 PM
From: Topannuity	Read Replies (1) \| Respond to of 99985

Stephen- I am out right now and considering the purchase of some "crash" puts early this week. That would be March out-of-the-money like SP 1100's. Yes, I too have been waiting and "hoping" for an easy point to buy in and then hold for awhile. However, buy and hold may not be the correct strategy anymore. I'm no guru and can't see much further than the next few weeks which seem to have "crash-like" potential. After February, I don't know what will happen. BTW-- this is another calculation I lifted from CrystallBall thread re: Feb. 26 as "the" day for a climactic plunge or low event. Msg#: 983 From: leeteam To: ALL Date Posted: February 17, 2001 at 01:51:16 Subject: .618 / .382 golden ratio summary -------------------------------------------------------------------------------- July 8, 1932 (low) to December 9, 1974 (low) 15494 calendar days 509 months 42.42 years December 9, 1974(low) to February 26, 2001(projected low) 9576 calendar days 314 months 26.17 years 15494 days 9576 days 509 months 314 months 42.42 years 26.17 years 7/8/32 --------------------> 12/9/74 -----------------> 2/26/01 (.618) (.382) In days: 9576 / 19494 = .618 In months: 314 / 509 = .617 In years: 26.17 / 42.42 = .617

To: Stephen M. DeMoss who wrote (69390)	2/17/2001 2:27:06 PM
From: KymarFye	Read Replies (1) \| Respond to of 99985

Stephen, I know your question wasn't directed to me, but I have to say that that, whether you prefer Crystal Ball readings or the more reserved prognostications of a Fleckenstein, it sure seems a bit early for a sock-it-away/wake-up-rich strategy. Whatever you think about Fleckenstein, what he says about picking bottoms or tops makes sense (repeating the URL just put up by TA): siliconinvestor.com Before considering speculative investment in a basket of possible tech leaders, I'd at least want to see a) whether the Nasdaq holds its very long-term uptrend (easy to draw the trend-line under the 10-year monthly chart), which is in danger again, and, intersecting with the same rather ominously but in a shorter-term time frame, b) whether it holds the January low, which also corresponds to the bottom of the first half of '99 trading range, within which most of the recent action has been taking place (including an ugly failure on the test of range right above): If support fails, it's just a little hop to the low 2000s, amidst breakage of the aforementioned tech Bull Market trend, implying at least the danger of a true secular Bear Market, and potential further downward movement and tests. (Even if one of such test does turn out to be THE BOTTOM, I'd think an options-savvy guy like yourself would at least consider LEAPS instead of outright equity purchases - have you done so?) Within this disaster scenario - amidst even further wholesale revisions of earnings growth targets - and even without it, "reasonable valuations" could start to look a whole heckuva lot different for all of the stocks you listed. Buy/forget/wake-up-rich might turn into buy/rue/wake-up-poor. Just because buying like crazy in the '70s produced Warren Buffet and any number of mini-Buffets doesn't mean that it HAS to happen again. Indeed, many normal financial presumptions far less ambitious than wake-up/rich, including even the nearly sacrosanct assumption that "a diversified portfolio of equity investments will always outperform the inflation-adjusted returns for any other asset class" may then come into doubt. From a statistical perspective, all such invocations of historical parallels (the last time such-and-such occurred, the last three times, the last seven times, anything on that order) are ludicrous hogwash. Even if you believe that there is some true dependency between the sequences of events (probably a question of faith rather than science, in my opinion), there can be no guarantee that the next time won't be the exception that proves the rule (works both ways, of course - one of these times, "it" really will be "different"). I think about what to do with the cash I'm not trading. I can't persuade myself that "putting it to work" on any basis looks like anything but a huge gamble. Might have a huge pay-off, but I can live without it. I still prefer speculating like crazy in the short-term with a fraction of my money, and putting the rest in as safe-looking a set of spots as I can find. As ever, you might prefer to keep my blanket disclaimer in mind: It may be best to ignore everything you read on message boards. I'd also add that my targets for the Nas (somewhere between 500 and 20,000, sometime over the next several years) remain intact.