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

To: ild who wrote (70519)	9/28/2006 10:38:45 AM
From: J_Locke	Respond to of 110194

On a "relative cheapness" scale, big caps are cheap right now, just as small caps were cheap in 2000. If you read the mainstream financial press (like Barrons) you see this argument made all the time now by smart, sane people - also the idea that "growth" stocks (higher price to book stocks in the spx) are cheaper than "value". If you have to be fully invested, the argument make sense. Me, I prefer to sit in money market funds right now and wait for the deluge.

To: ild who wrote (70519)	9/28/2006 10:55:57 AM
From: orkrious	Respond to of 110194

@pms -- trotsky, 10:27:39 09/28/06 Thu not much has changed on the sentiment front - XAU put/call OI is firmly entrenched at 1.42, which is a historically very bullish level, and the high point of 2006 thus far (it was first touched about a week ago). the Rydex pm fund has experienced its first sizeable inflow in quite some time yesterday, with $7 m. flowing in, pushing the cumulative cash flow ratio back up to 161 points - still well below the May 2005 low of 175. unfortunately the recent pattern seems to be that every time there are finally inflows registered, the pm stocks immediately get whacked again the very next day, so that an unwinding of the bearish sentiment can't get properly underway. this however is urgently needed to get a more durable rally going. it's a bit of a chicken-and-egg game - you need a bit of continuity in price gains to get funds to flow back in, and otoh, you need funds to flow back in to get some continuity of price gains. all that said, today appears to be shaping up as a typical pm Thursday so far - a bit of strength at the open, and then we drift lower. unless there's a renewed rally attempt later in the day, yesterday's enthusiasm of the fund buyers is bound to evaporate again. otoh, the large open interest in XAU puts provides the sector with considerable downside protection, so it mainly seems to be a question of patience at this juncture.