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Strategies & Market Trends : Ask DrBob -- Ignore unavailable to you. Want to Upgrade?

To: Drbob512 who wrote (40883)	7/20/2001 8:34:56 AM
From: jpdunwell	Read Replies (2) \| Respond to of 100058

DrBob, <<Not everyone agrees with you and I about the Nasdaq bear getting long in the tooth, but bears average about 15-17 mos, as I recall from stats.>> But this was no average bull, it was clearly a bubble. Why should we expect an average bear? I'm thinking there will be some serious long-term consequences from this bubble deflation. Trillions of dollars lost on bad investments (both corporate and equity) will not be easy to replace. This process will likely take quite a bit of time. Looks like a trader's market to me for some time, barring major capitulation, which doesn't seem forthcoming. JP

To: Drbob512 who wrote (40883)	7/20/2001 7:40:53 PM
From: kleht	Respond to of 100058

DrBob: <<Not everyone agrees with you and I about the Nasdaq bear getting long in the tooth, but bears average about 15-17 mos, as I recall from stats.>> I also have a hard time agreeing with the idea that the bear market is getting long in the tooth. I don't disagree that it is temporarily long in the truth, but for the longer term (6 months to 2 years) I have some qualms. These qualms deal with what happened after the markets reached major peaks in 1965 and did not exceed those peaks until 1982. I don't feel the current situation is anything like those years. But at that time we had several bearish markets - 1966, 1970 and 1973-74 as I recall. There were other drops as well. However, each time the bear ended we would have a bull move which never made a new high. I am not considering what happens after a major bear market, but rather what happens after a major bull market. To me, the latter is still the driving force, not the bear. The psychology seems to still be more related to the bull than the bear. After all, since 1997 we have not had one bear market but several, with the tech disaster the most prominent. At one point high quality stocks were doing great while almost everything else went down. Same with tech. While I feel that a good bull move could easily occur this year, I would be quite suspicious of such a move. So far, the move up we've had is simply built on hope - generated by goverment tax and interest rate cuts. There is no real valley yet to see across. Unless the US economy turns around fast, the lack of a recession here does not preclude recession in much of the rest of the world. Such a recession could then easily slam back against the US, with uncertain results. From a sentiment basis I would not be surprised to see a bullish move from here that ends somewhere down the road in the belief that the "bull market has returned". I feel that the put/call ratio and investment advisor bullishness that seems high could, in fact, be low enough to trigger a further rise into a bull trap. If so, this could take some time. Some on this board have thought we are still in phase 2 of a 3-phase bear market. I have felt we have left phase 2 into a sort of twi-light zone between phase 2 and 3. Meaning, since we never had a true panic washout (which would seem necessary after such a great bull market), that washout it still somewhere ahead - and not necessarily close by. This twilight zone to me is where the bullishness remaining from the bull market gets reinforced in the months ahead. What better way to get a washout than to be suckered back in one more time? This sort of scenerio could really give a body slam to optimism. Just speculation, of course. Best to not be too analytical. Market logic usually beats individual logic anytime, doesn't it? :>)