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To: Jibacoa who wrote (8226)	3/19/2001 2:11:44 PM
From: Chisy	Read Replies (1) \| Respond to of 13094

You are a brave soul. Right now my gut feeling is that cash is king. Chisy ----------------------------------------------- "As every experienced trader knows, sometimes you need to "go with your gut." As I told readers of SchaeffersResearch.com before the open on Monday, my gut feeling after Friday's close was one of alarm, because Friday, March 9, 2001 felt a lot to me like Friday, October 16, 1987, the Friday before "Black Monday." Why? The complacency that followed the market top in August 1987 astounded me at the time in light of very weak market technicals and a fundamental picture that included soaring interest rates, accelerating inflation, and a plunging dollar. On October 16, 1987, the Dow plunged by over 100 points (equivalent to a 500-point drop today). Yet the decline was greeted by an eerie silence on the Street. There was no panic during the session. The decline was steady and orderly and there was even a slight rally near the close. Moving "back to the future," I sensed a similar tone to the market action this past Friday. A steady, orderly decline that saw the Nasdaq Composite lose 100-plus points - a percentage decline equal to that of the Dow on 10/16/87. Again, no panic. In fact, the CBOE Volatility Index (VIX), the so-called "fear barometer," could not even manage a close above the 30 level despite recent peaks as high as 35. Perhaps most troubling was that the non-Nasdaq segment of the market that has thus far held up so surprisingly well has moved closer to some serious downside pain. This would mean that such indices as the Dow, the Russell 2000, and the NYSE Composite will no longer be safe havens. And such sectors as banking, brokerage, and retail will give up some serious ground. Sure it's a gut feeling, but it shouldn't be ignored. As every experienced trader knows, sometimes you need to "go with your gut." As I told readers of SchaeffersResearch.com before the open on Monday, my gut feeling after Friday's close was one of alarm, because Friday, March 9, 2001 felt a lot to me like Friday, October 16, 1987, the Friday before "Black Monday." Why? The complacency that followed the market top in August 1987 astounded me at the time in light of very weak market technicals and a fundamental picture that included soaring interest rates, accelerating inflation, and a plunging dollar. On October 16, 1987, the Dow plunged by over 100 points (equivalent to a 500-point drop today). Yet the decline was greeted by an eerie silence on the Street. There was no panic during the session. The decline was steady and orderly and there was even a slight rally near the close.Moving "back to the future," I sensed a similar tone to the market action this past Friday. A steady, orderly decline that saw the Nasdaq Composite lose 100-plus points - a percentage decline equal to that of the Dow on 10/16/87. Again, no panic. In fact, the CBOE Volatility Index (VIX), the so-called "fear barometer," could not even manage a close above the 30 level despite recent peaks as high as 35. Perhaps most troubling was that the non-Nasdaq segment of the market that has thus far held up so surprisingly well has moved closer to some serious downside pain. This would mean that such indices as the Dow, the Russell 2000, and the NYSE Composite will no longer be safe havens. And such sectors as banking, brokerage, and retail will give up some serious ground. Sure it's a gut feeling, but it shouldn't be ignored." Bernie Schaeffer Schaeffer’s Investment Research Inc.