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Strategies & Market Trends : WR's Momentum Trades -- Ignore unavailable to you. Want to Upgrade?

To: Bernard Ng who wrote (9654)	3/14/2001 2:44:38 AM
From: JD	Read Replies (1) \| Respond to of 11130

If you look at something like a 'Value Line Harmonic' Index...toss out all the non-traditional stocks (bear funds, closed end funds on EuroBonds...stuff like that), the 'average stock' has been underperforming money market rates of return since 6/98 (not including dividends). Insider selling is still accelerating, and yet I still see more buying than selling most days on the Ameritrade index. It looks to me like we have entered one of those 'super bear' cycles that follow those rare 10 to 15 year mostly bull runs (ending around 1840, 1906, 1929, 1968, 1998?). And they are not fun...I expect the major averages could drop to '95 levels by Oct, 2002, and eventually return all the way to '92 levels before the end of the decade. In all the previous super bull cycles, the peak PE on S&P 500 (or equiv) was 22...this one is 32. And all the rest saw the PE reduced to lows of 6 to 7.5 in the trough following their peaks (towards the end of extended, multiple recessions, when the 'E' had also dropped). I do expect to see a nice rally on NAS soon, would feel more comfortable if it were to happen after the FOMC meeting instead of running up to it. I have owned stocks since '66, mostly on long side...and will be daytrading and swing trading this sucker for a few more years....