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Strategies & Market Trends : BEAR MARKET/CRASH OR CORRECTION -- Ignore unavailable to you. Want to Upgrade?

To: Feraldo who wrote (6)	10/28/1997 8:30:00 PM
From: Serge Collins	Read Replies (1) \| Respond to of 10

Feraldo, I think what were experiencing is nothing more than volitility. It reminds me of the summer of 1996 when the market plunged 10% only to recover it all in a matter of days. That is not a correction. People are either suffering from amnesia or being hypocritical in comparing this fall to 1987. I agree with you that we are about to see a stiff correction, however this wasn't it. We came very close, but as fate would have it, the circuit breakers saved the day just before the bell. Sort of reminds you of a boxer being saved by the bell so he can fight another round. The problem here is that this little volitility didn't do a thing to bring valuations back in line with reality. Speaking of 1987, the market behaved in a very similar fashion to what we are seeing now. If you have access to back issues of the NY Times or WSJ on microfiche, take a look at the market in the weeks leading up to the crash and tell me if there isn't a similarity in the behavior of the market if not the underlying economic fundamentals.

To: Feraldo who wrote (6)	10/29/1997 4:40:00 AM
From: FIFO_kid2	Read Replies (1) \| Respond to of 10

Another good indictor of this sell off is the recent speculation in the microcaps. A nasty market sell off occurred in June and July of 1996 right after the run up of Comparator Systems IDID. The hint of something was soon to come was indicated by me because the market averages ceased to go higher and companies such as Safe-T-Lock LOCKC went from $.50 to $5.00 in two days. I couldn't exactly predict when the fall was to occur but I thought it was anywhere between a few weeks after the rise in LOCKC and the end of January of 1998. Regarding what is about to happen I believe if we continue to keep a positive interest rate scenario the market will probably digest this between now and early December then go higher. I don't see much more downside than 15% from the highs given the strength in bonds. However, I am more concerned this recent debacle will kill the positive activity in many microcaps. Since I always tended to favor microcaps I am very worried that many microcaps may lose their momentum. I believe we are in the process of developing new market leaders and the market will forge ahead in Dec until there are indications the Fed will raises rates.