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Strategies & Market Trends : Steve's Channelling Thread -- Ignore unavailable to you. Want to Upgrade?

To: westpacific who wrote (26605)	9/8/2001 3:51:43 PM
From: Crimson Ghost	Read Replies (1) \| Respond to of 30051

West: Technical guru Bob Farrell seems to agree with you. Sees a big bounce soon then a resumption of the bear. From BARRON'S today. Where do we go from here? Somehow, we had a hunch you might ask that question. And we can answer definitively -- we don't know. We're still of a mind that we're on the verge of a big bounce, but what's new? Actually, our conviction on that score was reinforced after chatting with Bob Farrell last Friday. With summer virtually history, Bob, sensible fellow that he is, has just about given up on a summer rally. But he does spot some signs of a pending rally. Among them: rising volume, greater volatility, a shift in speculative temperament as evidenced by a preference for puts over calls, and various and sundry other things that smack of an oversold market. But he cautions that any bottom will be temporary -- an interruption, not an end, to the bear market. He now dates the bear market as starting in '98, when at least half the stocks in the S&P 500 began extended declines. And he espies a secular change in the investment calculus, calling for much reduced rates of return. The trading rally could go on for some weeks, but any final bottom, he feels, is at least months away. And even then, Bob warns, we're in for a long enervating, frustrating stretch.

To: westpacific who wrote (26605)	9/8/2001 5:10:16 PM
From: exeric2	Respond to of 30051

Westpacific, I agree with your analysis - the markets are pretty stretched here. I've noticed in the last day that the largest cap Nasdaq stocks were stabilizing here while the broader market continued to tank. This was why the NDX held up the best on Friday and Dow and S$P and to a lesser degree Compx tanked big time. I'm only able to trade end of day using Profunds (IRA) so I put in an order of 50% ultraOTC at close yesterday. I think there might be continued downward momentum on S$P and DOW but am counting on being near a short term bottom on NDX (ultraOTC) I could have waited a day to go long but didn't want to chance it that the market took off. In the end I compromised and went 50% long the NDX. Of course 50% ultraOTC is really 100% because its leveraged 2 to 1. At any rate I've left 50% of my powder dry in case I'm off by a day or two. Here's hoping we're right. Eric

To: westpacific who wrote (26605)	9/8/2001 5:46:30 PM
From: The Freep	Read Replies (2) \| Respond to of 30051

<<It is setting up perfect for the PROS to crush the new players in this game.>> True enough. However, one thing that's different now vs. the April bottom is that, according to the Commitment of Traders report, the commercials (the so called "smart money") have actually increased their short position in the S+P as of this past Wednesday. At the April retest, they had actually DECREASED noticeably two weeks in a row. (I should point out that I ignored that information in April. . . and watched my few remaining shorts turn VERY sour very fast, a memory that still irks me.) People who study the COT reports tell me that, at the bottom, the commercials will be net long, not net short. We're not there yet, and show no signs of it. Again, of course, the commercials don't play so much short term as they do long term, so a strong bear market rally is always possible (perhaps even fueled by some commercial short covering?). Their deep pockets allow them to simply roll out to the next month and the next, whereas us small fry cannot afford to watch our money dwindle so. Yes, your targets could be hit in half a day without a problem, Westie, but there's also nothing that says we don't get a snapback first thing Monday. Maybe there won't be any bad news for a whole day (the economic calendar is pretty empty next week until Friday actually). If I knew the answer, I promise I'd share. I don't. But I'll let ya know after Monday. the freep