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

To: Jack Clarke who wrote (8654)	11/20/1997 10:22:00 AM
From: Cynic 2005	Read Replies (2) \| Respond to of 18056

Jack, speculative excesses in the markets is like being on drugs. It is difficult to shun the habbit. The profits derived from buying earlier dips and selling in to subsequent rallies have created a cash cushion for the October dip. As far as the people who believe in buying the dips are concerned, they believe in it. But, you are old enough to know that there is one stage, late in the bull-cycle, buying the dip is absolutely the stupidest thing to do. (Well, I am wise enough to read and learn from the history. -g-) My stong belief is that we are at that stage now. All the world events combined have created a very complex financial disarray which require some basic fundamental shifts in the economy. 1) In the event that Japan needs to sell US treasuries en-masse, the Feds may have no choice but rise the interest rates. 2) Even if the Feds don't rise (or don't have to rise) the rates, a flight to quality or concern about deflation or both could yank the yields down rapidly. A "quick" fall in interest rates is bad for the stocks and a "slow" decline is actually a positive. 3) A series of dire earnings warnings could derail the excess optimism and there is a good possibility of this happening in the very near term. I have anticipated that this weak markets will be up (not this strong, though) and the next week to be brutally down. First 2 weeks of December ahould be massacre! Patience is the virtue of any investor. Especially if you are short in this market! -Mohan

To: Jack Clarke who wrote (8654)	11/20/1997 10:30:00 AM
From: Mike M2	Read Replies (2) \| Respond to of 18056

Jack, why is the market exploding to the upside? temporary insanity is the only explanation I have. The bulls would like to think this is a flight to quality but our ship will sink in due time. read this gold-eagle.com Mike

To: Jack Clarke who wrote (8654)	11/20/1997 10:46:00 AM
From: Tommaso	Read Replies (2) \| Respond to of 18056

Jack, I don't understand how the US can run these trade deficits year in and year out without penalty either. Unless the dollar is so solidly established as a store of value and a medium of ecxchange that we can simply serve as banker to the world and supply its currency. Sometimes I think it's like New York City. A lot of my money seems to pass through there, in the process helping to support a vast conglomeration of people and institutions that I have no particular fondness for but cannot do without.

To: Jack Clarke who wrote (8654)	11/20/1997 10:50:00 AM
From: Simon	Respond to of 18056

"" Sometimes I think I am reading Alice in Wonderland."" Don't step in from of speeding trains or stand behind them. The only trouble with this train is, it goes 100 MPH in forward and reverse and it is damn hard to tell which way it will go next. 2nd. Never jump off a speeding train. I think a book on mob psychology would make good reading. Plus the need to perform as a money mgr. necessitates you go with mob. As long as you do this your are in good standing. If the thing blows, hell, you'r gonna get fired anyway. It is dangerous to put perception in front of the train. Were the Dutch so stupid to think they needed 40 million tulip bulbs? Up to the point some guy said,Geeeeeeez, I got to get rid of some of these tulips. They are still trying to unload the remains on the rest of the world.

To: Jack Clarke who wrote (8654)	11/20/1997 11:01:00 AM
From: Defrocked	Read Replies (2) \| Respond to of 18056

Jack, Mohan, Threaders: FWIW , today's trading is making me more nervous not less. As much as I would like to go unhedged and return to my long exposure of pre-August such a rebalancing is not yet in the picture for me. Most of today's rally has emanated from the S&P500 futures pit where at least three major buy programs resulted from significant deviations above fair value this morning. By itself this is neither "good" nor "bad" but rather reflects (a) significant institutional activity at the MERC or (b) speculative purchases to challenge the technical stops placed above 955.0 and attendant short covering. My outlook is still predicated on tonight's AMAT CC and tempered by continuing evolving risk of deflation. While Japan was up 2.94%, most other Far East markets were down, many significantly such as Malaysia -11% and Indonesia -4.7% (despite IMF support.) Commodity prices are still declining with gold down, oil down, grains steady after a down day due to reduced export demand, and the CRB down. If this scenario continues demand for computers from the Far East, Europe, and potentially the US could also decline even affecting additional capacity plans for chip manufacturing. On top of this, the yield curve continues to flatten. In this environment, stock market rallies without positive economic validation will occur without me as I will completely exit the long side even in my core portfolio. BWDIK. Good trading all.

To: Jack Clarke who wrote (8654)	11/20/1997 12:28:00 PM
From: Elllk	Read Replies (2) \| Respond to of 18056

Jack I am a member of your club, maybe even the president of it. Asia was all red last night except Japan which rallied 3% because the ex-PM said a government committee should look at use of public funds for the bank problem!!!! and Saddam continues to dick us around while he buys time to hide more of the stuff we are supposed to be monitoring and ......as you said the market rockets (well, volume is suspect). I thought Europe would be less inclined to follow the nonsense but not so. Larry