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To: Alias Shrugged who wrote (9503)	11/8/1997 9:38:00 AM
From: Patrick Slevin	Read Replies (3) \| Respond to of 17305

There are many reasons why I believe there is unfinished business on the downside.... ...Unfortunately, I get this feeling I am becoming part of the majority in my opinions... However, up until July I operated on a high margin...I now am about 40% in cash, 35% in stock or stock equivalent, 20% in bonds or equivalent, and perhaps as much as 5% in derivatives, these derivatives being primarily index puts. It is difficult to synopsize all the reasons why my viewpoint is negative....there are many reasons, many of which I have probably forgotton in favor of reasons which (to me) are more compelling. Delining tops, cycle theory, gurus who say the decline is over (Zweig is rumored to be rethinking his bold statement in Barron's last week), lunar cycles, patterns similar to crashes in '29 - in 1857 (I believe, it's been awhile since I looked at that one) - as well as in '87, and so on and so forth. But for now let's stick to one or two things, as I have to get 2 kids off to a dental appointment in about 15 minutes. Currency problems and an undertone of deflationary trends, amongst other things, appear to be leading toward recession (perhaps depression) in Asia and Latin America. The financial interconnectivity of these regions with Europe and the US will certainly result in economic problems for us here at home. The real reason the market rebounded here on Oct 28th was the selloff in the dollar....globally, traders were repatriating monies from the US putting the fear of God into the markets. A couple of days later there were IMF and Treasury bailouts. These are examples of financial interconnectivity -- Patterns; In 1929, it came down off a top in a big hit, a rebound for about a week, and a real crash 2 weeks after the first hit. see stocksmart.com (Best I could do on short notice) To quote a newsletter writer I follow, whether or not one would think that I am banging the fear drums here it is prudent to "at least point out this relationship"...for this hypothesis to be invalid the market must prove it so by moving up and out of the comparison. Stocks are not moving from weak to strong hands -- rather it seems to be quite the opposite. Equity and index put buying in odd lots have been the order of the day for the investor driving the VIX up to settle in the 30 plus range...a range that, according to a CBOE member who is very good at such things, gives up the probability of a 500 plus point day in the range of somewhere from 1 to 2 percent of the time. In other words, at least once in less than 100 trading days. The combination of lower highs and lower lows imply to me the nature of the move is down as the trend is most definitely down...I have believed and posted that we were in a downtrend at least since September....there have been rather few who share this opinion, we shall see. I have more ruminations, but I have to get the kids off.