Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Galapagos Islands -- Ignore unavailable to you. Want to Upgrade?

To: X Y Zebra who wrote (6508)	10/11/2002 8:16:47 PM
From: mph	Read Replies (1) \| Respond to of 57110

$4BILLION in charges? wowie.

To: X Y Zebra who wrote (6508)	10/11/2002 8:18:12 PM
From: X Y Zebra	Respond to of 57110

Worden Report... I like the Worden Brothers for their equanimity of their commentary. Meaning they are never rabid bulls or bears. They just read their charts and interpret them te best they can (and they do it well imo)m without their respective egos getting in the way. No gurus, no egos, no predictions, just their commentary. _________________________________ The Worden Report (Friday, October 11, 2002) Potential The trouble with a bearish opinion on this market has been a shortage of sellers. Chilling though the news has been, the sellers haven't been able to knock the market into a free fall. What has been holding the market down is bad news. The buyers, who have the biggest army, have obviously been reticent to move. On October 1, I ended the Worden Report with the following: “And with everything going for them, the sellers haven't been able to pull it off. At this point, the burden of proof has switched to the bears.” And that's the way it remains. We're not out of the woods, but it's hard to see where enough sellers to knock this market down are going to be found. Not when the bears have broken ranks and are running for their lives. The burden of proof lies with them. But was it only short selling that caused the market to explode upward? Who knows how much of the action yesterday and today can be attributed to short selling? I don't think the high-market-cap Russell 1000 was particularly hounded by short selling. Yet that average had 913 advances today against only 75. That's over 12 to 1! That was caused by nothing but short selling? Now the Nasdaq 100 - there's an average we can feel pretty confident was carrying a lot of short interest. Advances led 88 to 10, only about nine to one. The Dow was 28 to 2 (14 to 1) two days in a row. I think we can say there was something more than short covering at work today. But what's wrong with a market coming off a bottom on heavy short covering? You can assume it's been a characteristic of every major bottom of the last century - at least. At bottoms speculators are heavily short on balance. It's the nature of a bottom. People feel bearish. The short side looks like easy pickings. And so they get caught short. That doesn't mean there is something wrong with the bottom. Today it was easy to see the market ignoring bad news - a vital characteristic of a bull market. However, it's been happening in a more subtle way for at least of couple of weeks. How far is this rally likely to run? It isn't necessary to know that. It's always the same. You try to get on the right side of a trend as early as possible. Then you stay with it until you are able to detect signs the trend is ending. You use loss-cuts to protect yourself as much as possible. Mainly what we're looking for is potential. Anybody should be able to see that this has the potential for being an extraordinarily important bottom. It may not work out that way. But the potential is there, and you're not going to be able to exploit it unless you're willing to take risks. As I've often said, and I'll say it again, you get paid for taking risks. The upside potential is great. The downside potential, in my opinion, is not as great. But more important, you can control the downside potential with loss-cuts. Nothing is going to happen next week, or the week after, or the month after, to guarantee you that a bull market has indeed begun. All of the certainties are in the past. -DW tc2000.com