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

To: Bonnie Bear who wrote (19716)	6/3/1998 4:51:00 PM
From: Oeconomicus	Read Replies (2) \| Respond to of 94695

Bonnie B, I wonder whether the "public", the buy-the-dips mutual fund investors that rescued the market last October, will be watching the Russell's 200 day. Seems to me any bounces will continue to be small until the indexes most people watch, the S&P and the Dow, are approaching 10% down. If we get a sharp sell-off to get us close quickly, I'd bet on a decent bounce. OTOH, if we get there in baby steps as we've seen so far, it'll be interesting to see how the public reacts without a clear wash-out/entry point. Then, the question becomes not whether earnings will rebound in the second half, but rather are we headed for the "R" word. In any case, I think it's too early to look for a real reversal. Even Cramer, this morning, said until he sees some '99 earnings, he's not buying at these levels. Not an exact quote, but I understood him to mean that the outlook for the next year's corporate earnings is cloudy enough that to buy now just isn't worth the risk. Bottom line is people besides me are uttering the "R" word and if that does, in fact, come to pass, one does not want to be holding stocks at an upper 20s market PE. OTOH, if all we get is flat (rather than down) earnings for a year or so out, you won't miss much by not being in stocks for a while. The likelihood of strong earnings gains over the next 4 Qs, IMO, are almost nil. BWDIK? Bob PS: Is tonight the night for the Nikkei to go below 15,000?