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Technology Stocks : Altaba Inc. (formerly Yahoo) -- Ignore unavailable to you. Want to Upgrade?

To: Bill Harmond who wrote (10806)	5/11/1998 11:46:00 PM
From: Michael Collings	Read Replies (3) \| Respond to of 27307

>>Firstly, in a severe bear market most of the money simply evaporates. There are few "bad guys".<< True only to a point, William. Specialists build huge short positions at market tops, and they profit significantly during a market drop. Of course they are also required to make a market so they buy a few shares here and there while the market is dropping. But huge money is made on the downside. In 87, there was a lot of complaining that the specialists did not do their job during the crash and of course a lot of the specialists were saying they lost huge amounts of money themselves, yet not one specialist that I know of was bankrupted during the crash. Odd isn't it? Very few individuals short stock as most of the public don't understand shorting and consider it "unAmerican". But have you noticed how the short interest on the market has reached an all time high? In January, the short interest on the over all market had dropped significantly just prior to the market rise. In fact the last big move in Yahoo began on the day its short interest showed a drop (March 15). So I assume that much of the increase in short interest on the market is specialist and Market maker positions and it is unlikely they plan to take a loss. I have little faith that the small amount of mutual fund money inflows is going to change the outcome. >>Secondly, fund flows don't reverse suddenly, and they have been very strong. Folks don't run down to human resources en masse to stop their 401K contributions.<< Again, this provides only a small cushion to the 12.5 trillion market. The Japanese are the savers; it used to be that they saved on average 20% of their income compared to our minor 5%. Tell me how that saved their market from crashing? And William they've had low interest rates for years and years. Every market top has a "hook" that keeps everyone in the market when they shouldn't be, some widely followed indicator that simply doesn't show any problem and therefore the market can't drop. I can't think of any better "hook" right now than low interest rates because certainly everyone KNOWS that the market doesn't drop when interest rates are not going up. But one thing to remember is that ordinary bull markets end with a rise in rates. But manias end in exhaustion and this market is showing the signs of exhaustion. Everyone is in that wants to be and there isn't enough money out there to come in to override the selling pressure of both the shorts and the longs. Of course this is just my humble opinion, but I have too many indicators that are showing some major problems right now and I personally would not risk being long in this market. Now I am sure you would argue that this is not a mania or a bubble but just take a look at all the markets in the world and tell me this is a normal bull. yardeni.com