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

To: William H Huebl who wrote (22594)	7/28/1998 6:37:00 PM
From: Daniel Ray	Read Replies (2) \| Respond to of 94695

Hello everyone. . . . we certainly live in interesting times! Since everyone loves predictions so much I'll add a few of my own. I think the 55-day rule is a very important concept to keep in mind. It isn't like the laws of thermodynamics or anything, it is just a general rule that seems to hold. We are all so close to the phenomenon that it is very difficult for us to step back and see what is happening. So I would expect a major sell-off in mid- to late September if we do not get above 1200 on the SPX cash before then. That is my gut feeling. If we do make marginal new highs, I think a major correction will occur sometime in Nov-Jan. January would be my pick. A nice down month that could give a nice clear indication to all the bozos that the markets will trend down in the last year of the 20th Century. Of course, it doesn't really take downward movement at all for relative values to change and multiples to adjust. I do believe that fundamental events determine the broad moves of the market . . . the multi-year trends. I also believe the markets are effective leading indicators. Unfortunately, as the saying goes, "the markets have predicted nine out of the last five recessions." A bear market -- a sustained downward trend is what I mean -- will come and probably (perhaps, maybe, BWDIK) soon. If I can digress a moment, it is instructive to consider the 1934 - 1998 period here. 1934 was the worst year of the Great Depression. But if you look at one of the popular averages back then and assume 8% return compounded annually, you will come out with numbers that are almost exactly where we are right now on the popular averages! I know that the composition of the averages changes, but you get the drift. Try it at home! Adult supervision not necessary! So my idea is that the U.S. markets, as we draw to the close of the 'American Century' are at close to fair value. There will be an attempt at 10,000 on the Dow, probably a failed attempt. And there will be sell-off(s) to the 7,000 area perhaps. But we will trend towards fair value. Remember how long the Dow flirted with the 1,000 level? Expect the same phenomenon with 10,000. Of course, if the global economy truly does expand at the pace some people think it will, U.S. corporate profits will increase, and if they increase enough we can get to higher levels on a sustainable basis. This in my mind is a reasonable possibility, though it may well take 10 years to get to where the most optimistic feel we will be in 18 months. New paradigms and all are a lot of hype, but the world _has_ changed in some fundamental ways in the past ten years; and these changes are far from being understood much less assimilated; the cycles of history _may_ have accelerated. Know one knows where we are going short- or long-term. But it will be an interesting ride. Market players are fixated by numbers . . . the markets _are_ numbers in a sense . . . but they are also natural systems defined by human behavior, and numbers can never define natural systems, they can only describe them. So we search for certainty in our tidy mathematical system only to find the at the core the numbers _do not_ tell the whole story. And why not? Because the quantities they represent are not stable over time. Anyway, this is too cryptic and I will be called names for it. Let fly! All in all I am neutral about the markets, just trying to spot the trends like you guys. And in this market I would sell straddle spreads. But it's too much work for me. Staying humble and mostly in cash . . . it's a wonderful thing that the best things in life are free! Best wishes all.

To: William H Huebl who wrote (22594)	7/28/1998 8:24:00 PM
From: Barbara Barry	Read Replies (1) \| Respond to of 94695

Bill, OOOPS! I meant calls today!But I am not being too smug with holding calls....NOTHING is safe right now!I decided to hold my calls overnight on the oex,but I plan on being on being nimble...now where is that "Firm" or Jane Fonda tape?????Gonna need lots of workout tapes to keep up with this market!!!!You can be sure I won't hold calls long even if we have a big rally Thurs.You know me...not comfortable being a "call girl"....<VBG> Regards, Barbara