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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Dealer who wrote (44494)	11/28/2001 11:40:10 AM
From: Dealer	Respond to of 65232

To Crash or Not To Crash (11/27/01) Wednesday looked like a reversal day. The SPX started out weak, reaching a low of 1141, down about 16. It then staged a furious rally through mid-day and into the late afternoon, reaching a high of 1163. That was in line with revised upside centered moving average projections for a variety of cycles. Then as suddenly as it arose, the rally died, and with that, a sign that reality had begun to rear its ugly head. The Sphincters' Index ended down nearly 8, at 1150. Extreme distortions preceded this rally. It has lasted longer, and risen a good deal further than Doc expected. He's been saying for weeks that it's over. So what's the point of repeating what you already know. The open question is, will the market crash from here? It's too early to know for sure. Crashes usually begin slowly. They look initially like a normal correction. It is unusual for a market to crash almost directly from the high as the bond market did the last two weeks. Normally prices first pull back, bounce a little, come back down to a level widely perceived as support, then KABOOM. But if the bond market can fall apart, virtually from its high, the stock market can do it, and very well may. Stock indexes are at the very top of descending long term downtrend channels. The have room to fall a long long way. Intermediate stochastics show the market to be grossly overextend on the upside. Intermediate momentum is turning down from big negative divergences. Portfolio strat-ego-ists have the lowest levels of cash in history. The VIX has been in the 20's 6 straight days. To Dr. Stool this is a screaming sell signal, as the Stool Bands chart of the VIX shows.