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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (37062)	5/19/2001 11:50:55 AM
From: Mike M	Read Replies (1) \| Respond to of 65232

Zeev, I would certainly agree with you that it is the change in direction of VIX & VXN rather than the high or low that is most compelling for market direction. I think the same is true of the equity only Put/Call ratio. That ratio can get pretty low but as it begins to rise we should expect the market to struggle. On another note. I see that you have rather nimbly donned your bull outfit for the time being. You are a survivor and I'm not surprised. Good call. Something that is bothering me about this market is that technical conditions are pretty much reversed from where they were at the end of December and the end of March. We now have many pundits calling the market bottom and projecting smooth sailing into next year. While some call for a test, most think the bottom will hold and then its onward and upward. Some are looking for a melt-up that will soar to astronomical numbers. There is an air of bullishness, admittedly fostered by AG's open checkbook. What bothers me is that, thus far, we haven't sent any of the indexes to a point that clearly proves the longer term bullish case. We still have a basket case economy, the cost of oil is holding up way too high, utilities are warning of a very bad summer, and, externally, things are heating up pretty badly in the Middle East(I fear that war may be imminent). This summer is not shaping up to be a great investment platform for the bullish case. Looking at things from the Elliott Wave one could easily make a case that the bear is dead for now. One could also argue that we are near completion of a very strong fourth wave correction and looking into the mouth of a frightening drop. I don't favor either scenario although my heart wants to believe that you and I will be wearing our bull suits for a long time... I know that you have a line of demarcation around 2080 (intraday)and closing around 2050. If those are breached are you expecting this bull move to be over or just looking for a successful test. Do you still see 1850 as the likely Maginot line?