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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: John Hunt who wrote (7576)	11/11/1997 10:41:00 AM
From: Cynic 2005	Read Replies (5) \| Respond to of 18056

To all, a few thoughts for the next couple of months. The month after the earnings period was the strongest for a while (ex. Feb 97) So far in Nov, looks like they bought all they can on the first trading day of November. No follow-up. The world markets are telling them to be cautious. The analysts and investment strategists with agendas are telling them to buy. They are lining up the media to tell the investor to stay put. Now that they have seen the damage that excessive speculation caused elsewhere in the world, big leveraged positions (margin, speculative long futures position etc.) are slowly being unwound in to strength. Of course, that is my speculation and I have no proof for that other than an article in WSJ today. This causes the liquidity to dry. One more big hit like October 27th will cause serious losses at many trading desks which further deteriorates the liquidity picture. Add to that, some people are selling positions with gains elsewhere to offset losses in SE Asia. Further, there will be a stampede to lock-in most of the "remaining" profits for the year. I think that these are the psychological forces currently at work. I also believe that the world market turmoil has changed something for good. I bet none of the markets that have fallen 20% or more will recover to new highs in at least 1 year. Perhaps I am seeing this through colored glasses (my positions.) Unless the liqudity picture looks better, this market is headed lower, much lower, by the end of this year. We will have a re-test of 7000 by end of next week. A mild rally towards 7200 and then another retreat to 7000 followed by failed test of 7000. I think weill close below 7000 by end of Nov and around 6500 by end of December. I think we will see a big oneday drop of 4% or more either this week or the next. But definitely before Thanks Giving. I expect the following the happen in the next 3 weeks. (my bird told me! -g-) 1. More bad news will be coming out of Asia and Latin America. Europe will accelerate the current collapse. 2. I think that at least 3 companies in the DOW 30 list will give a profit warning. CAT, JPM, MMM, HWP are among the likely candidates. I wouldn't be surprised if GE warns. I expect another profit warning from Motorola (a lot of exposure in SE Asia.) Before end of January, the networking sector and, of course, cisco should hit the wall. 3. Most of the speculative junk will be shredded in to half or even more. Momentum stocks like PSFT, BAANF will hit the wall. Now, I can go out on a limb. -g- -Mohan

To: John Hunt who wrote (7576)	11/11/1997 11:41:00 AM
From: Zeev Hed	Read Replies (1) \| Respond to of 18056

John: This looks like the beginning, wait until it evolves nicely by Friday. From the size of the spot, I would say this is worth a drop of 200 Dow opoints by the end of FRiday (around 7400) Now, this should be followed with a semiserious VBG, but I am afraid that my tea leaves show exactly the smae spot (VBG), so I'll go with my tea leaves, they were pretty good last week, right now they are cloudy for the very near future (wobbly, namely Wed and Thu,) but clear on Fri and corresponding to the psots. Good, grief, I'd better rush and buy myeslf a solar telescope. Anyone knows which planet is Pluto squaring in the next few days? Whatever that means. Zeev