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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: James F. Hopkins who wrote (17663)	4/30/1998 9:05:00 AM
From: eddie r gammon	Read Replies (2) \| Respond to of 94695

From looking at Globex after the ECI data I think all us bears should be worried. I think we are in for a sharp rise today. erg

To: James F. Hopkins who wrote (17663)	4/30/1998 9:19:00 AM
From: Tommaso	Read Replies (1) \| Respond to of 94695

In the Wall Street Journal today, section C, is a regular report on mutual fund activity. There continue to be strong inflows. I never seem to see in one place all the different figures for mutual funds. Apparently the total for everything is about 5 trillion dollars right now--about 5,000 billion--and I think that means everything: equity, bonds, and cash. Maybe foreign funds as well. If money continues to go into the funds at about 180 billion dollars a year, that is about 3.6% of the total. In other words something like 4% increase (I don't know what it was for 1994-1996) seems enough to cause a 15-20% rise in equity values (all very rough guesses). The total equity fund cash position is probably less than half that (since equity funds are only part of that whole 5 trillion. So if equity funds committed every last remaining penny of their cash reserves it could only push the market maybe 8-10% higher. In the other direction, an attempt by equity fund holders to withdraw 10% of their money could cause an immediate fall of 20% or more in the equity markets. And that would be if there was orderly liquidation of the positions. An attempt to withdraw another 10% could cause an additional much larger decline, perhaps taking the markets down to a level 50% below their peak. If a real panic set in and mutual fund holders tried to convert even larger percentages of their positions into cash, the decline could be a lot greater. What I have suggested so far only involves a cash-out of 20% of current NAV. I welcome comments on these estimates, and especially links to sites where more complete information on mutual fund allocations may be found.

To: James F. Hopkins who wrote (17663)	4/30/1998 9:21:00 AM
From: Oeconomicus	Read Replies (2) \| Respond to of 94695

Jim, we're in the same boat and it's taking on water. Problem is we can't start bailing for another ten minutes (a little longer for options to open). My question is whether the worst of the rally will come so fast that anyone dumping puts/short positions might be better off waiting. The market was so primed to go wild one way or the other based solely on the ECI, but no one cares that GDP came in a 4.2%. That's .9% over forecasts, a miss that at any other time would have scared the hell out of bond holders. But someone said AG watches ECI, so ... Hmm, if I was paranoid, I'd think the spinmasters did a little advance work here. Bob

To: James F. Hopkins who wrote (17663)	4/30/1998 9:10:00 PM
From: Bull RidaH	Respond to of 94695

Jim, The whale strikes again! I went ahead and started exiting my short futures positions as soon as the positive reaction to the Econ. #'s was evident (ahhh, the privileges we globex traders enjoy..). At 1108 (june s&p), stuck with my previous stated strategy and lightened up (ouch!)on other shorts, and by 1114, was net long into the 1122 target of the 3 day consolidation pattern (coil). However, I don't see much in the way of pattern projections to send this move up higher, and my wave count and retracement analysis suggests a reversal lower is on the nearterm horizon. The 62% "golden mean" retracement area of the 1st wave down held within inches (1121 on the SPM). I reestablished 70% of short positions by days end in the 1120 to 1122 area, and am saving the rest for a spike up before/after the report tomorrow. Thanks for your candid analysis, and will be watching your megacap numbers in the coming days to confirm the reversal lower. Good Trading to you, David