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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 (26325)	9/3/1998 8:10:00 AM
From: Philipp	Read Replies (1) \| Respond to of 94695

Hi Bill: With VIX spiking to over 50 and using Oct 27th as prototype, why wouldn't a mere attempted retest to the low 7,600s suffice for the next move down? At least for now? I don't think that a VIX of 50 is high enough, since this is not a mini-plunge like last year. I expect the total downturn (however, long it lasts) to be at least as bad as 87 (though different) and then we had a VIX of almost 150, when there was a real panic. Also we are down less than 20 % so far, so the bubble is still well inflated. At the moment, I think that market sentiment is still deteriorating, but is not at panic levels yet; based on anecdotal evidence, bull to bear ratio (not bearish enough) and the fact that this last significant rally was even shorter than the previous one (the Clinton relief rally). However, today is an important day, since yesterday could have been a bear trap. So if the market has a strong rally today and stays up near its highs (no late sell-off!), I will reconsider this scenario. I don't think that this is likely though, since the average investor at least is in no hurry to jump back in and be burnt again. A bad-case scenario is that the market ends below 7400 Dow tomorrow, since that will confirm the bear market to the last analyst. I would then expect serious panic selling Tuesday/Wednesday. So, I will just watch today and take no actions. Regards, Phil