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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Alex who wrote (16780)	8/28/1998 9:23:00 AM
From: Crimson Ghost	Read Replies (2) \| Respond to of 116823

This forecaster has been deadly accurate about this bear and remains VERY BEARISH. SHEPLER MARKET TIMER for 8/28/98 Current Position: Rydex Ursa fund since 8/12/98 Purchase NAV: 10.24 (split adjusted) Current NAV as of 8/27/98 close: 10.75 Return on current trade: 4.98% Shepler Market Timer Returns since 4/8/98 inception: 16.36% Buy and Hold S&P 500 Index Returns since 4/8/98: -5.36% Market Commentary: We're back from our recent travel, and very happy to see the market continued to follow our bearish prognostications. Thursday was quite a day for Shepler Market Timer subscribers, as the S&P 500 cash index lost 41.6 points (3.83%) and the September S&P futures continued to sell-off hard after the cash market closed finishing at 6.59 discount to cash. This suggests that Friday's trade will see more deterioration unless the futures rally in overnight trade which is highly unlikely. We think that we have just witnessed the start of the crash wave that we have been expecting in this timeframe. The market is giving us several indications that Thursday's bloodbath was just the opening salvo in a much larger downwave. Market internals were at record setting bearish levels Thursday. New lows hit an eye-popping 1009 issues Thursday. We have not verified it, but we are fairly certain that this is an all-time record. Meanwhile new highs were a laughable 14 issues. That's right, new lows beat out new highs by a whopping 72 to 1 margin! Decliners continued to trounce Advancers by an 8 to 1 margin at 2871 issues to 358 issues. To make matters worse for the bulls, all this is happening on expanding volume, confirming the strength of the decline. Thursday's trading saw 939 million shares trade hands, the second highest volume ever on the big board. Of that 939 million shares, 882 million was down volume, an all-time record down volume. The nearly record setting volume coupled with the major deterioration in the new lows versus new highs leads us to believe the main event has gotten underway. We will have to watch events closely over the next few days, but if volume continues to increase as prices drop, we could be in for some major fireworks. Our proprietary buy/sell indicator is getting close to the buy zone, but is not there yet and will require more heavy selling if it is to get there in the coming days. If we see another very large decline Friday, then we could be set-up for a mini (or not so mini) crash low on Monday or Tuesday of next week. On the market sentiment front, speculators continue to buy the dips, showing an incredible level of complacency despite the clear bear market warning signals. The OEX put/call ratio Thursday was .66, an astonishingly low value for a day that saw the Dow fall 357 points. This put/call ratio is the type of reading that would normally be seen at record highs as opposed to the depths that the market is currently trading at. We cannot overemphasize the danger signalled by such speculative complacency. An OEX put/call ratio of .66 is a signal of a topping market, not a bottoming one. It is spectacularly bearish to see such a reading on a massive down day like Thursday. What it tells us is that bulls are still in denial, searching frantically for the next major bottom. We wonder how much damage the market will have to sustain before they finally capitulate. Rydex fund switchers seem to have gotten the message though, as the Rydex ratio jumped to 129%, and assets in the Ursa fund surpassed $1 billion for the first time we can remember. Some johnny come lately bears are joining the party, but that doesn't mean the party is over yet. A Rydex ratio of 129% may have been a buy signal in a bull market, but who knows how low it will fall in a real bonafide bear market such as the one we are currently in. Remember, oversold in a bull market is quite a bit different than oversold in a bear market. Bulls are going to get slaughtered trying to pick bottoms in this bear market as we get oversold and stay oversold trending ever lower. The bull market mantra was buy and hold, and let the trend be your friend. We are going to employ this in reverse, as we sell short and hold, and let the trend be our friend. This baby bear has a long time yet to mature. We remain short the market via our current highly profitable Ursa trade, with no intentions to make any switches until the dust settles.