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

To: P.Prazeres who wrote (22993)	8/1/1998 11:40:00 PM
From: dennis michael patterson	Respond to of 94695

Paulo: what will cause the public to hit the "sell" button? How far down does it have to go before people get out? I think people will wait at least until we're in the 7000s (assuming we get there), but I base this on my mother, who will never sell.

To: P.Prazeres who wrote (22993)	8/2/1998 12:16:00 AM
From: Thomas C (Hijacked)	Read Replies (1) \| Respond to of 94695

PPrazeres, well I agree, it of course will be extremely difficult to pinpoint when and if a crash will occur. But I really think there is a good possiblity IMO. The reason? Well, it all boils down to greed and fear and market leadership and behavior of crowds. If you look at this market in a pure psychological manner anything is possible. The market has now IMO lost its leaders (more and more big caps that will come out with earnings warnings now and 3rd quarter). A market mania crowd needs a leader to keep the bull moving. When the leaders retreat, the crowd scrambles loses direction and panics. The emotions of fear and panic are so much greater on the downside and that is why such huge amounts of selling can happen. I can see this market trading on emotion now. The good GDP number comes out and we get a decline. Just like in Oct97 when good earnings reports where coming out and stocks were selling off on the news... Tom

To: P.Prazeres who wrote (22993)	8/2/1998 1:10:00 AM
From: James F. Hopkins	Respond to of 94695

Paulo; Has any one thought of checking the amount of put options sold out forward ? say on the Major stocks such as the Nifty Fifty where would these things kick in to support the market. While options have been around for some time, they were not near as many writers back in 87 as you have now. Some people think shorts can't be forced to cover in a bear market, but you can bet your rear they can be forced to cover. The floor traders and specialist did get hit hard in the fall of 87, you can bet they learned a lesson. If any such fall looks like it is about to happen, the availability of shares to short dries up , and lent out shares will get called in before the market ever goes that far down again. In short, shorts will be bought in by the brokers automatically long before they make the big windfalls they may hope to make. If any one is going to make real money off a big down turn it will be the brokers, and the holders of puts. Any way people keep talking of how far the bottom can be, but if they are not tracking the puts , and shorts I don't know how they could come up with any reasonable figure. The market is a lot more sophisticated than it was in 87, so I don't see it taking that kind of tumble. Some of the lows being tossed around on this thread are just wild speculation and I have a hard time giving any credence to them. In Feb I told Bill we had kissed 7600 good by and would never see it again, and I still can't see any type of BK that could take us below that now, even under the worst conditions. If it did manage to do it , well it would be so fast and back up that I doubt any individual investors would be fast enough to exploit it. But a drop to that would be very hard now and rather gruesome, and could cause a long dry spell , unemployment and many other side effects that I would rather not see. Jim