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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: GraceZ who wrote (90781)	4/6/2001 2:33:37 AM
From: patron_anejo_por_favor	Read Replies (2) \| Respond to of 436258

<<You can't borrow your way out of debt>> Your gramps was a wise man... Regarding your point, that one must always test one's working model on investing...I agree with that wholeheartedly, whether I'm bullish or bearish. One always has to keep the point in mind as to what objective signs would mean they are wrong (at least to the point where they'll shut down their risk), especially when shorting. Failing to establish firm limits cost a lot of bears dearly in '97-'00. It's just basic risk management in my book. A few things that would make me strongly concerned that the bear is toast: 1) a rally producing an O'Neill follow through day (ie, a 1% increase in a major average (INDU, SPX or NDX/COMP) on increasing volume on the 4th to 7th trading day following a new intraday low. Note that the COMP was only on day 1 today. This is a fancy way of quantifying the observation that most rallies occurring in the first 3 days after a new low is hit are failure-prone. 2) Leadership (ie, high relative strength) from sectors in anything other than defensive issues. I think terbacky was still number 1 as of today, for instance.... 3) Solid bases put in for stocks of growth companies (definitely not present now) 4) In macro indicators, I'd like to see an NAPM over 50, a meaningful rise in unenployment, decreasing consumer credit relative to income on a month-to-month basis (ie, higher savings rate), and the clownbuck under 105 or so. None of these is as important as the first 3, but its additional useful confirmation that at least SOME of the excess has been worked out in the debt/dollar bubbles. Untill I see ALL of the first 3 criteria met, every rally is a bull market rally and should be shorted when momentum exhaustion or significant technical resistance is found. All trades with stops of course. Regards Patron