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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: Clappy who wrote (15674)	3/27/2003 8:05:33 AM
From: abuelita	Respond to of 89467

clappy- i'm convinced that's what this war is about. rose

To: Clappy who wrote (15674)	3/27/2003 9:51:27 AM
From: lurqer	Read Replies (1) \| Respond to of 89467

April Fool For me Short Term (ST) market prediction is a hazardous undertaking. Since October the market has been in a trading range. The range is wide enough, that successfully predicting the oscillations has been quite profitable. It’s entirely possible that range may continue, but I currently have my doubts. My reasons have to do with the state of the economy, the forthcoming news and the markets technical state. So let’s take these in order. As we approach the end of the first quarter of ’03, its reassessment time. Soon we’ll be into the earning season of the first quarter reports. It’s not that I believe that the earnings reports themselves will deviate that far from expectations, it’s the guidance that will. A number of fund managers (and individuals) made a bet last October that ’03 was going to be a recovery year. For that bet to still look good, we’re going to need to see Rosy Scenario in many of the forward looking guidance statements in April. Given my current assessment of the economy (particularly with the additional stresses of war and high oil prices), I just don’t think Rosy is going to make her curtain call. “Visibility is poor” just won’t cut it. So those who were counting on even a mini-boom in ’03, will be disappointed. It’ll be time to start making revisions – downward. The biggest news maker is, of course, the war. And the news for April is going to be the BfB (Battle for Baghdad). Now I’m no better at ST war predictions than I am at ST market predictions. My best guess is that, unlike Scott Ritter’s prediction, we’ll win the BfB. The problem is the costs. Already, the predictions of Cheney, Perle et al have been shown to be wildly optimistic. While I think we’ll win the BfB, I believe it will be far more difficult than most market participants currently believe, and with far higher casualties. Saddam, has from the outset, believed that the only way he could win was to produce a pseudo-VietNam. A high casualty rate is his goal. To achieve the neo-con objective of shocking the Middle East into a new paradigm, it is not only necessary for the US to win , but to win quickly. Given these goals, both may, unfortunately, come to pass. In any event, the war costs are likely to be much higher than anticipated. Now for some, the idea that news can have any effect on the market is heresy. For those I would say consider last week. With the idea that this was Gulf War I Redeux, the market soared. Moreover, for some time we’ve been assaulted with news that positions had better be established, because remember what happened at the last war. When it becomes apparent that this war is different, not only will any war premium be removed, but a more sober assessment of the market will ensue. Technically, I believe that last weeks ramp (and after Monday’s decline, this weeks bump-up) has seriously weakened the bears. Thus, one of the major supports for the market has been removed. Whether you believe that the recent explosive rallies are caused by the PPT or da Boyz, or some unholy combination of the two, a sina qua non is a plethora of shorts to fuel the rally. The fuel is spent. If the market starts to fall, and the already frequently burned shorts fail to pile-on, then it’s “look-out below”. For the above reasons, I believe that May Day is likely to see the market considerably lower than April Fools day, but this is just the opinion of a fool a.k.a. lurqer