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To: Shack who wrote (130567)	3/10/2006 7:47:03 PM
From: chainik	Read Replies (1) \| Respond to of 209892

<<<we have risk-averse folks selling into a rising market, to me that would be unequivocally bullish>>> Eventually yes, but what if the selling continues for 2-3 more months before a good bottom is reached? It's a question of timing. And this good bottom may be well below comp 2200. The charts you are looking at are pointing up. You suggest that the trend will reverse only when optimistic extremes are reached. The chart of SMH below 37 looks bad. Using your logic, one can speculate that the selling may continue until extremes in pessimism are reached. Not even close right now. Not that I disagree with you (everything you say makes perfect sense), but I see very mixed market with weak former leaders. In many respects, the situation here is similar to February-March of 2005. A lot of neutral/mixed readings. Can go either way.

To: Shack who wrote (130567)	3/16/2006 9:05:48 AM
From: skinowski	Read Replies (3) \| Respond to of 209892

Jason G did reply to my note - a few days ago. He didn't offer any particular disagreements with your remarks... stating that it is a matter of interpretation and of different time frames. But, apparently, his research does show that such periods of falling optimism tend to precede declines. Indeed, imo, there is always this balance at play - between a "healthy" wall of worry, and a real weakening in "animal spirits". Btw, check these comments from VVV about the stock/bond ratio - as well as my reply. Curious stuff. Message 22264810