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Strategies & Market Trends : The Millennium Crash -- Ignore unavailable to you. Want to Upgrade?

To: Kerry Phineas who wrote (2270)	2/25/1998 8:00:00 AM
From: Arik T.G.	Respond to of 5676

Kerry, >> OTOH the market will get some degree of support... Do you mean on the way down? Let me remind you that bull markets have no resistance and bear markets have no supports. Once the market is down 25-30% of its high, there is a positive feedback loop not unlike the one that drives the market higher. There is also the effect on the economy. Once paper profits are gone with the wind, and given credit installments are at record level (percentange off income), the consumer will slow down or maybe even shut down new purchases. The equity bubble is one of the reasons consumer confidence is at 30 years high. The bear market will have a material adverse affect on this index, too. Depression is an economic phenomenon but also the mood of the ones living thru it. >> its the only decent explanation for the recent craziness I've heard That's an excuse, not an explanation. Another excuse is : cos earnings will continue to grow indefinitely (saying there's no business cycle anymore, just continued growth) in other words- the current boom will continue for ever. That's the new era thinking. A straight line extrapolation of the last 3 years, even as we face the SEA crisis. An explanation could be- the stock market is in a bubble stage, and needs excuses for people to believe in rather then say they speculate with their retirement funds. ATG