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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: yard_man who wrote (857)	9/19/2003 12:42:02 PM
From: russwinter	Respond to of 110194

<...you need time ... maybe two-three more months> Yep, the recognition stage, however the market will already be down 15% and falling fast before even the smart ones figure it out.

To: yard_man who wrote (857)	9/19/2003 2:33:19 PM
From: russwinter	Read Replies (3) \| Respond to of 110194

Here's another big bear sounding a bit shaken. Also notice that Prudent Bear (which I've just started using for some the accounts I handle) was only down 3 cents to 6.50 during yesterday short seller bloodbath (I lost more than 1/2% yesterday on my short trusts me). That's suggests they too may be getting cute, and will miss the turn, which I still think could be pretty profound. Volume not even a billion with an hour and half to go: finance.yahoo.com^TV.N Comstock Partners, Inc. Market Breaks Out To Upside September 18, 2003 We were planning on writing today about the various catalysts that would bring this market down to more realistic levels. The three different catalysts that we believe to be the “prime suspects” are an enormous bankruptcy, the U.S. dollar collapsing, and/or a bust in the housing sector. We are leaning towards real estate as the most likely catalyst. We will save that for next week as the market has started to act as if it were 1999. The various market indices have broken out to new 15-18 month highs with enough volume to scare even us. We believe the same momentum players that drove the market to the ludicrous levels of the late 1990s are fueling this market. The individuals that are playing this market must have had a taste of wealth 4 years ago and don't want to miss the next bull market. The professionals who are managing “other peoples' money” are scared to death of winding up in the same position as Dick Grasso. One of the largest differences between the present market and the “mother of all manias” is the insiders' attitude. Back a few years ago-- even the insiders were bullish on the market while presently the ratio of selling to buying is at historical highs. As we have mentioned before, many other sentiment indicators are also flashing warning signs such as the percentage of bulls and bears in both Investors' Intelligence and the American Association of Individual Investors poll. Both show a large number of bulls relative to bears—see attachments. We are as comfortable today in believing this market will come to an ugly ending as we were 4 & 5 years ago. However, we also don't believe in losing too much money as the maniacs are in the drivers seat. As we have stated before, if you have positions which have unlimited losses like short sales and short futures, you should try to preserve capital by cutting back or eliminating these positions and wait for the market to roll over before initiating new positions. Limited loss positions such as puts can be established, but even here we would advise going out as long as possible to take the short term volatility out of the picture. We have to guess that the maniacs behind the wheels that are driving this market are pleased with Greenspan's position of keeping rates low as far as the eye can see-- regardless of how strong the economy gets. Accompanied with this stance are economic releases that are less bad than in the past few years, but are not barn burning by any stretch of the imagination. The unemployment insurance claims are just 1,000 shy of what most economists think are not conducive to economic growth while the four week moving average is still signaling contraction. The continuing claims rose to the highest level since mid July and these figures don't include 800,000 workers receiving federal benefits, which are available to workers who have exhausted state benefits, typically after six months. Just because the Leading Economic Indicators have risen for the past 4 months and came in as expected at 0.4% the chart we have attached shows that the index is still flat lining and doesn't at all look like past recoveries. The semiconductor equipment book to bill ratio for North America edged up to .91 in August from a substantially downward revised 0.90 the previous month. Bookings remain significantly lower than current shipments, as they have for the last year, and are virtually flat so far this year. The Philly Fed index dropped to 14.6 compared to 22.1 in August and was lower than forecast. If these are the economic statistics that are supposed to be so great, we wonder what the market would do if we actually got really strong economic statistics like job growth or sustained corporate investments in plant while Greenspan swears to keeps rates low for a “considerable period”.