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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: t2 who wrote (77968)	6/5/2001 9:30:04 AM
From: Alex MG	Read Replies (1) \| Respond to of 99985

Doesn't it bother you that stocks are still overvalued by ANY historic measure?... We've had a 18 yr bull market and the last 5 years in particular have been almost purely liquidity driven. And in addition to the corporate debt the consumer debt is at all time highs. And that looks like it's the only thing still holding up this market. There's really no sign of a turn-around yet. So those that are buying now are just betting on a new bull market solely on the hopes the Fed will save the day. The Tinkerbell theory, "clap if you believe". Of course you might argue the "New Era" theory. Never mind that every stock market mania has been rationalized by similar "New Era" arguments. Just as great bull markets "overshoot" on the upside, secular bear markets end only when investors drive valuations to absurdly low levels. In other words, we really haven't seen true capitulation yet IMO. And this has been the longest and most highly valued bull market in history. Having said that, I actually agree that there is likely to be one more very healthy rally sometime before the end of this year and maybe lasting into 2002 before the reality of valuations once again sink in. But I think it's more likely to happen after another swoon down in the Aug-Oct time frame.