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

To: Jane4IceCream who wrote (33780)	8/30/2001 10:48:12 PM
From: SouthFloridaGuy	Respond to of 37746

Excellent piece on psychology of a bear market: ...This gentlemen goes over all his indicators such as the short interest and the put/call ratio and the ARMS index. His indicators all suggest that the market is oversold. 'So why doesn't the darn thing rally?' he asks. Viva La Difference! "This fellow doesn't understand how bear markets work and how they're different than bull markets. In a bull market oversold indicators work well, because when a bull market is 'sold out' or 'over-sold,' that's about the time when the primary bull trend re-assets itself. But remember, in a bear market the shorts, the pessimists, the bears -- are correct. Thus a heavy short position in a bear market, unlike in a bull market, is a CORRECT position. A short position in a bear market or a heavy put position in a bear market -- they're aligned correctly and in harmony with the bear trend. "And that's why they're not working now in calling bottoms. This is a concept that seems to escape almost every technical analyst. But it's a crucial concept. BEAR MARKETS DON'T WORK THE WAY BULL MARKETS DO. I don't know how I can put that any more emphatically. Technical analysts, write that down, and post it over your desk in large letters. BEAR MARKET INDICATORS DON'T WORK THE WAY THEY DO IN BULL MARKETS."