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

To: Mr.Creosote who wrote (45065)	11/8/2005 1:13:50 PM
From: russwinter	Respond to of 110194

cash out refis could help move things along a bit longer. That could explain the short term strength in the financials.> There's been an increasing thaw in these starting about the first of October (). Apparently the bulls on financials (like those on homebuilding) think it's just a pause? Looks like a high out of control inside fast ball to me, but if the Riskloves like that kind of pitch, more power to em. () MBAA refi index, new one manana. 9-16: 2354 9-23: 2107 9-30: 2192 10-07: 2005 10-14: 2096 10-21: 1917 10-28: 1863

To: Mr.Creosote who wrote (45065)	11/9/2005 6:19:46 PM
From: russwinter	Read Replies (2) \| Respond to of 110194

Bernie Schaeffer: schaeffersresearch.com There are a number of commonalities between these two 160-day breaks: Both occurred during quarterly earnings reporting months, which is ironic given the focus on the bullish implications of "strong earnings." Both "should have" resulted in major downside breakdowns (such breakdowns have occurred repeatedly in individual blue-chip names after a 160-day break). Heavy selling pressure (see volume bars) was met by equally heavy buying. Very heavy structural put support is the best explanation for the lack of a major breakdown in each case, along with covering support from heavy SPY short interest. You will recall that by "structural put support" I mean the natural supportive buying that results from very heavy put selling at strikes below the current market price. The current sojourn below the 160-day is approaching its one-month "birthday," and if past is prologue in terms of price action and time, we are about to lift off once again back above the 160-day. Once again, I would expect any rally coming off the bottom of the range to exhaust itself before the top of the range can be penetrated. When the market price is not clearing down to its "natural" level, there is insufficient opportunity for sideline buying power to build to the point that it can fuel major rallies. Also, structural support does not fuel rallies, it merely forestalls declines. In fact, near the top of the range there tends to be enough overhead call open interest to create "structural resistance." One final note. The chances for a "cold, grey market that will last you for the rest of your life" are not trivial. The core of the market's "resiliency" is merely complacency twice over. The first level of complacency is the astounding willingness of so many players to sell cheap put premium. The second level of complacency is the refusal of these put sellers to panic on market plunges, which allows the structural support from the put buyers to take hold. The upside is a market that "never" goes down, no matter how terrible the external circumstances. The downside is that there is no such thing as "never" in the market, and at such time as this structural support does break it will break hard, so hard as to be beyond the imagination of any who have not experienced live markets like that of 1987. In this man's opinion, it is sheer folly to be 100 percent invested in equities under these conditions.