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To: crustyoldprospector who wrote (8805)	3/16/2003 8:58:30 AM
From: russwinter	Read Replies (1) \| Respond to of 39344

This Price Headley comment pretty much sums up my stock market outlook (but not GOD). Not enough fear to spark more than a very quick war rally. There are signs that the war starts this afternoon (Sunday) or tomorrow, so it's show time. PH: "But the real question is when do you know it will be a meaningful rally lasting several months or more, versus the 2-3 day bear market bounces we have seen too often? I think the key is measures of investor sentiment need to be hitting major fear extremes to suggest that the bear move has flushed out enough investors to make for a more meaningful rally back as sidelined investors slowly return to stocks. Did we see this heading into the Wednesday bottom? I think we did not see conclusive enough evidence according to the major sentiment indicators I follow. The RYDEX fund flows did show too many traders stacked up on the bearish side on Tuesday's close, which was a plus. And while the CBOE Volatility Index (VIX) surged above the 40 level at Wednesday's intraday low, the 50 level has proved more significant as a bigger peak in fear in the last several years. Also, the CBOE Nasdaq Volatility Index (VXN) did not come close to showing a peak in fear, suggesting non-confirmation. Finally, the equity put/call ratio was showing more optimism than pessimism on our daily readings on Tuesday's close, which adds to the mixed sentiment picture. This implies to me that while technical momentum is strong day-to-day, this market does not have the necessary fuel to make more than a short-term move before we dip again. As a trader, that doesn't mean you immediately fade this move into this strength, but you look for signs that we are rolling over again to add to new shorts and put positions. The final leg down is usually quite steep and profitable for the bears, and this time should prove no different. The majority says the news of a war with Iraq will spark a monster rally. I'm betting that such hopes will prove fleeting and any disappointments after war breaks out will likely spark a further exodus out of bullish stock positions."