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To: patron_anejo_por_favor who wrote (236182)	4/17/2003 12:38:33 PM
From: ild	Respond to of 436258

Date: Thu Apr 17 2003 12:02 trotsky (stock market) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved there may be SOME oomph left in it, but the seeds for a big medium term decline have been sown...small traders are e.g. 10:1 net long the mini spoo, and 8:1 net long the mini ND. put buying is drying up...the extremes in Rydex funds ( the bear/bull asset inversion that pertained near the lows ) have been relieved, and speculators have amassed big short positions in the bond market ( note, in Rydex there's a 10:1 net short position in the bond funds now ) . at the same time, mutual fund cash levels remain near an all time low, well below the 5% level, and WS equity strategists are as bullish as ever - equity allocation percentages remain close to 70%, not far off an all time high ( typical bear market bottoms see this allocation percentage closer to 40%, and mutual fund cash levels well above 10% of assets ) . bonds have already begun to rally in anticipation of the looming sell-off in stocks. all that said, it's possible that the stock market continues to meander for a while near the recent highs - previous distribution phases in the course of the bear market have taken up to 2 months. the stock market remains one of the most overvalued in history, based on every yardstick except the ratio of earnings yield to bond yield. this ratio is btw. what has kept Wall Street's 'brightest' so bullish throughout the plunge...they forgot to study previous deflation era bear markets - had they done that, they would have known that the ratio that was so important off the lows of the inflation era bear of the 1970's and beyond ( until '98 more or less ) loses its power in a deflationary era.