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To: The Freep who wrote (6930)	7/11/2001 11:31:56 PM
From: patron_anejo_por_favor	Read Replies (3) \| Respond to of 209892

What's different from April? Let's see... 1) Valuations are MORE extreme (ie, PE's on the SPX and NDX are higher, earnings are lower for both than in April) 2) Despite 3 more months of pumping, their is still evidence that bubble boy is pushing on a string. Now he has fewer weapons at his disposal, unemployment is rising (BTW, the weekly jobless claims number comes out tomorrow before the opening). Long term rates have risen, choking off financing to companies and particularly to the refinance-crazy consumer 3) Speaking of the consumer, he's more in debt than ever and showing signs of exhaustion (the credit report from last month indicating decreased credit spending). All this despite RECORD mortgage refinancing in the first half of the year (and record low home ownership equity, ie, smaller piggy banks to tap in case of emergency). 4) Sentiment numbers are a mixed bag. I'll spot you the Rydexes, although the larger cap funds like Ursa and Arktos have not inverted compared to their bullish brethern (usually the condition at bear market bottoms). 10 day put/calls are only .72 (they maxed in March at 0.85 and in April at 0.82). stockcharts.com[h,a]daclyymy[pb10!b200!d20,2][vc60][iUb14!La12,26,9!Lg20!Lf] The VIX is hardly extreme, it's only at .28. A few days rally would drive it back to the lows (hell, tomorrow might even do it!<G>). Other sentiment indicators suggest LOTS of complacency, eg, the Investors Intelligence survey today showed 51% advisors bullish to 25% bearish. Brokerage equity strategists remain at record bullish levels. 5) Insider selling is at an all-time high: thetimes.co.uk 6) The main "story" being spun in the April rally was that the second half recovery would continue due to BubbleBoy and his magical printing press. Now it's put up or shut up time for that theory. Will corporate insiders risk guiding higher (only to be crushed like a bug when they miss two months from now)? I think not, most of the guidance will be like we heard from EMC. All that said, a bounce is in order, perhaps lasting as long as expiration. If it fails, we're probably closer to an all out crash than we've been since 1987. Of course, if something unforseen happens overseas (ie, major debt defaults or escalation of mideast hostilities), all bets are off.

To: The Freep who wrote (6930)	7/12/2001 12:55:16 AM
From: Shack	Read Replies (2) \| Respond to of 209892

there is more bullishness on the boards today, but was there before the close? In other words, has the AH ramp led to rampant bullishness I really only care about how quick we return to euphoric levels. Like I said, there was doubt off the April 4 rally and it took a while before the sentiment got really complacent. Not to mention the VIX was at 40 back then..it is only at 27 right now. but I do want to be wary of the stealth summer rally Healthy fear and I think it is possible. Where does the VIX drop to then? We got to 18 during last summer's rally. The Fed is still printing money. We are closer to when the rate cuts "kick in." These two are of course related and can be gauged by M3 and other monetary aggregates. The growth rate of M3 and M2 are turning down. M3 actually dropped this week though this has happened before, but never two weeks in a row so I am watching and am on alert for the deflation of the credit bubble which means rate cuts and monetary stimulus will have been rendered useless The Rydex numbers were skewed more (bullish for the market) now than I recall them being in early April. Not true, here are the ratios of bull/bear assets for the two periods. The second number includes money market assets as bear assets. Today .20, .89 April 4 .34, 1.30 Was there a clear wave count then that implied a rally? It wasn't perfect but there was a count. BTW, the similarities of the Nasdaq daily chart to the 1929, 1987, and especially the 1946 BK on the DOW is pretty freaky. I put us in the equivalent of mid-August on this chart: sharelynx.net

To: The Freep who wrote (6930)	7/12/2001 7:36:49 AM
From: Clappy	Read Replies (1) \| Respond to of 209892

I'm just wondering what we might find different between now and early April that would imply we WON'T rally. . . Here's two things I can think of: 1) VOLUME It's going to take a lot of volume to push through all that resistance above us. That comes from computerized buy programs kicking in. Mutual funds loading up. Panic buying. I'm not sure that we've reached similar levels that trigger such buying. In the face of all this technical damage? Especially during summer vacation. Where will the panic buying come from? I don't panic as much while sitting on a beach holding a drink with a tiny umbrella in it. <g> 2) FED CUTS. In April we still had the unseen hopes for approx. 100 basis points in Fed cuts. I don't think we have much more than 25-50 points left for Greenspan to throw onto the barely smoldering fire. Now it's "wait and see" time. When will these cuts begin to show up on the balance sheets? For the techs, when will we see those chip orders coming in? IF the SOX start to surprise we may see some stronger buying but until then, it's still wait and see. Perhaps the houses/funds will try to provide some bait to catch some of that tax cut cash like they did in May to get some of the tax return money. This only sets up one incredible short opportunity. Rallies without volume don't stick. Maybe the NDX gets it's ABC correction this next month or so but doubt it breaks any key resistance points above NDX 1900. Now where is my beach chair? Is this some sort of a new font I'm seeing on SI or do I have sun tan lotion in my eyes? -WhileMyGuitarGentlyFreeps