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To: patron_anejo_por_favor who wrote (120018)	9/7/2001 1:51:06 PM
From: Box-By-The-Riviera™	Respond to of 436258

dailynews.yahoo.com

To: patron_anejo_por_favor who wrote (120018)	9/7/2001 2:00:37 PM
From: Tom Smith	Respond to of 436258

Merval prints 300 quote.bloomberg.com

To: patron_anejo_por_favor who wrote (120018)	9/7/2001 2:07:06 PM
From: ild	Read Replies (1) \| Respond to of 436258

From LARRY MCMILLAN optionstrategist.com Market Commentary Friday, September 7th, 2001 The selling in the market is beginning to accelerate. Still, there is not any real sign of the kind of extreme pessimism that one typically sees at the bottom of a market that has declined this far. For example, consider the put-call ratio. The weighted equity-only put-call ratio is rising strongly on the right-hand side of the chart. This is indicative of a recent increase in put option buying. However, just because there have been some individual days when the put-call ratio has had high readings, that does not make a bottom. Rather, as the put-call ratio rises to its eventual acme, as the stock market is falling, by necessity put buying is heavy. It's actually when the put purchases wane -- when everyone that has wanted to buy puts has bought them -- that the market actually turns and rises. This occurs simultaneously with a peak in the put-call ratio – something that is not imminent. There is no prerequisite for the put-call ratio to rise to the levels it reached at the April bottom (320), but it is quite a ways below that level (180) -- indicating that traders were actually quite a bit more bearish then than they are now. Another indicator that is a very good gauge of the public "throwing in the towel" is volatility. The CBOE's Volatility Index ($VIX) has finally risen above the 30 level, but in times of severe market downturns (which we seem to be experiencing now), $VIX typically shoots up to near the 40 level – or even much higher -- before a trading bottom is made. The pattern that we look for is for $VIX to quickly rise to an extreme level, and then to fall back quickly -- sometimes even during the same day. Such an action creates a buy signal. So, while it represents progress that $VIX is finally begin to heat up, there is no sign that it has reached a spike panic peak -- or is about to. Finally, price patterns are negative. The downtrend lines that we have been pointing out for some time remain intact. Furthermore, the recent resistance levels not only held, but propelled the market quickly lower. At the current time, we are a little oversold. $OEX has dropped to the point where it is touching the Bollinger Bands -- an indication of being oversold. However, there is still strong resistance from 590 to 600, and it is going to take a major reversal of trend for prices to penetrate that area on the upside. In summary, the oversold conditions indicate that there is a chance we're about to see one of those sharp, but short-lived, rallies again. However, the major, primary trend remains down. until we actually see buy signals from the put-call ratios and $VIX, as well as a prices penetrating upward through resistance, we remain in a bearish trend.