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

To: Joseph G. who wrote (9721)	11/28/1997 2:26:00 PM
From: Cynic 2005	Read Replies (1) \| Respond to of 18056

Joe, are you looking at any shorts now. I need something to put for a quick double. -g- -Mohan

To: Joseph G. who wrote (9721)	11/28/1997 2:46:00 PM
From: Cynic 2005	Read Replies (1) \| Respond to of 18056

To all, Some musings: It is tough to see objectively especially since I am so heavily short on this market. However, I am trying to be open for some technical indicators which will possibly take me and my positions by surprise. I haven't found many. The technical indicators that point towards continued strength for the markets are: 1. Long term (15 years) uptrend is not brocken; 2. DOW and S&P look strong. DOW is flirting with the 50 DMA. When you look at these, there is a reason to believe that the market is headed for futher gains in the coming months. BUT!! I remain pessimistic based on the fundamentals. Putting the past couple of months' events in perspective: 1. The steep fall of October was a reaction to the Asian situation and not domestic. Bulls argue that any weakness due to Asian slowdown has already been factored in to the market. I am not sure about that. The first test of the domestic strength comes in a couple of weeks when the earnings warnings will be coming out in full swing. I am expecting the warnings to be much severe this time. If the WS eternal spin on the earnings warnings as "company specific" will hold water or not remains to be seen this time. 2. The underlying breadth in the past few weeks is not at all impressive. Most new highs are set among the defensive stocks. No clear leader(s) emerged in the last 4 weeks. (Sorry, I don't take IBM for an answer. -g-) Decliners are slightly ahead of the advancers in the past few days. New-highs and new-lows are almost even. with considerably more new lows than new highs on the Naz issues. 3. In relative terms, the volume on NYSE has increased slightly from the pre-mini-crash level and that of Naz declined significanlty. What this tells me is that speculation (as indicated by frenzied trading on Nasdaq) is being tempered, albeit slowly. 4. More volume of NYSE take a out a lot of liquidity from the market as an average NYSE issue has a bigger cap than the naz issue. Also, naz volume is always a double count. So, watchout for that declining liquidity. The charts are there to fool a lot of people. I think that the bulls are headed for another "surprise." -Mohan