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Strategies & Market Trends : Sharck Soup -- Ignore unavailable to you. Want to Upgrade?

To: velociraptor_ who wrote (16696)	4/18/2001 12:51:11 AM
From: dday	Respond to of 37746

".the market has essentially turned a blind eye to the truth" And just what is the truth? As a technician whose work I respect, Velo, I am finding statements like the one quoted above to be almsot as interesting as your stellar work with charts. It always seems to me that 'technicians' get in trouble when they presume to 'see the light' and start to pinpoint targets. (I recall you dropping NASDAQ 800 and Dow 6500 ) Prechter, Granville, Acampora etc. all have fell prey to this tendency at some time in their careers. In some cases, they 'need' to provide this type of commentary due to the nature of the position they hold on the Street. In some cases, success probably emboldened them. In my some 20 years in the trenches, I have always found TA and charting to be a useful tool and an integral part of my decisionmaking. But I find it is better to let the market tell me where it is going rather than vice a versa. Isn't the 'market' itself the 'truth' ? And don't technicians ideally determine the trend and follow it? So, why is a rally (bear market or otherwise) 'ignoring the truth'. ?? As one who is also observant of 'sentiment', I find both on this thread and other trading related threads almost a sense of disbelief that the market could rally and ignore such disturbing fundamentals. Why is it so hard to believe that a market could rally after being down over 60% from its top in one year??? Final observation for the fellow yelping about earnings and p/e's etc. Earnings reports, 10k's, 10q's etc. are history reports. That is all. Nothing more...nothing less. History reports. They tell what a company has done. Not what it will do. (Everyone always yells at me when I say this so feel free <gg>). The market is not a measurement of the past, rather, it is a discounter of the future. ( How far in the future being the subject ot much debate.) So, the history reports are only of interest in terms of clues as to future performance. When NT, MOT and CSCO basically throw in the towel on 2001, the market discounts it..... that is one reason why we had the massive decline in tech from 2000 to today. All these nasty reports are 'history'...considered by the market at an earlier time and recorded in the much lower prices witnessed on the tape over the past 12 months. On the other hand Oil and gas fundamentals improved in 2000-01 and the market afforded equities in this group higher valuations....and the beat goes on...... (fact is, there was a pretty healthy bull market in many groups of stocks in 2000 but that is another debate). With this in mind, we can conclude that earnings will undoubtedly fall in 'down cycles' . But, since the market anticipates the next up cycle, the price of the underlying stock may stabilize or even appreciate as the earnings (remember it is a history report) drop ---creating the illusion of a very high p/e. What may, and I mean may, be happening is that the market is anticipating that earnings have either bottomed or are even about to rise again. Hence, the stock goes up despite a lackluster history report. Hence, the illusionary high P/E. Hope I explained that ok. Good luck, Bob