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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: 2MAR$ who wrote (38942)	4/12/2001 3:51:55 PM
From: Jerry Olson	Respond to of 50167

we did not break thru 1180 SPX or 2000 NAZ...something is up here...lots of sellers are still out there...

To: 2MAR$ who wrote (38942)	4/12/2001 3:53:03 PM
From: Ron Dior	Respond to of 50167

I'm all cash again. Was able to make one quick trade on CMVT end of day. This market is great for trading but is quite insane.

To: 2MAR$ who wrote (38942)	4/12/2001 3:55:21 PM
From: 2MAR$	Read Replies (1) \| Respond to of 50167

Open Interest Drop In S&P Futures Could Mean Mkt Bottom By Debbie Carlson Of DOW JONES NEWSWIRES CHICAGO (Dow Jones)--Some technical indicators in the futures markets are suggesting the worse of the weakness in the stock market might be coming to an end. Open interest in the Chicago Mercantile Exchange's Standard & Poor's 500 stock index futures has dropped sharply since peaking last month at the height of the equity carnage, and volume has slackened as investors move to the sidelines. Furthermore, ownership in S&Ps might be changing hands between speculators and institutional firms, an historical signal that market perceptions could be reversing. "The fact we're seeing a shift in open interest is a sign that the bulk of the bear market may be over. We might be running to a light at the end of the tunnel," said Nick Kalivas, senior interest rate and equity analyst at Refco. Since the most recent leg in the market's decline started Feb. 2, front-month S&P futures contracts have fallen about 22% in value, hitting a low for the June contract of 1088.50 March 22. During that period, open interest in S&Ps shot up about 18% to a record 572,426 contracts on March 14. Traders noted some of the drop in open interest is from commercial firms removing protective short positions, or hedges, that had shielded them from the drop in the stock market. "A lot of people have taken off hedges after the rally (on April 5)," one floor broker said. "But now people are hesitant to put back on those hedges." The hedge-lifting theory is backed up by a drop in short positions by commercials, or institutional firms, in the Commitment of Traders reports released weekly by the Commodity Futures Trading Commission. As recently as March 13, commercial firms were net short nearly 95,000 S&P futures contracts. But since that time they've winnowed down that position to almost 57,000 contracts net short as of April 3. Commercial firms are considered the smarter money, since they generally use futures to offset risk and take a longer-term view. Kalivas also noted that while institutional firms are cutting back on shorts, the large speculators are moving out of their long positions and becoming less bullish. This swapping of views often denotes a change in market psychology. Sherwood Tucker, senior commodities specialist at Infinity Brokerage in Chicago, said the fact a lot of the hedges have come off could bode well for S&Ps if firms decide take the next step and get long the market. Another sign of exhaustion has been a drop in volume in the pits. While some put the blame on the religious holidays this week, traders point out the volume has lagged since the March S&P futures contract expired mid-March - about the time open interest began falling. March's average daily volume was about 126,000, but the average daily April volume so far in June S&Ps hasn't cracked the 96,000 mark. As everyone knows, for every long there's a short, and motivations to exit the market may differ. Some analysts say longs have closed out their positions to await a clearer economic picture. There's also a desire to avoid the quarterly earnings season and its pull on prices. "Some have moved to the sidelines, especially after views that the (economic) slowdown would be extended," said David Hightower, editor, the Hightower Report. Tucker also noted some of the selling seen in June S&Ps might be related to taxes, which is something that occurs often at this time of year and may have been an added short-term weight at the end of the slide. Despite the many signs suggesting the bear market is over, Kalivas strikes a note of caution if investors are trying to put the bear back in his lair. "(These) are signs the bear market is mature, not over," he said. "Trade with the trend, but keep in the back of your mind not to be as stubbornly short versus three or four months ago. Don't chase rallies. The last leg down could be a powerful percentage point move. Look to buy it not to get in front of it." -By Debbie Carlson, Dow Jones Newswires; 312-750-4072; debbie.carlson@dowjones.com. (END) DOW JONES NEWS 04-12-01 03:53 PM * end of story *