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

To: HairBall who wrote (30389)	10/6/1998 8:07:00 AM
From: Kip518	Read Replies (1) \| Respond to of 94695

Peter Eliades' latest call: I promised a further update on the market. I will try to make it brief. Almost all the conventional indicators are screaming the market should be at or near some kind of bottom. The cover on the new "Newsweek" says "The Crash of '99," an inordinately large group of analysts seem to be talking about a crash, some of the recent TRIN or Arms Index readings have been among the 4 or 5 most oversold of the past 16 years, the Dow has made 5 attempts to break below the 7550 level and has been unable to do so, the Utility Average is at an all-time high and the long bond is at record low yields. Who in his right mind would be looking for a crash here? And yet, that's exactly what I'm looking for and the scenario is crystal clear. Remember, however, the odds are overwhelmingly against such an occurrence. In both 1929 and 1987, the paths after the breaking of the initial lows from the all-time high were amazingly similar. If we assume October 16 is the ideal day for a crash or panic and if the prior two patterns are followed i.e. if there are 5-6 market days between the breaking of the initial lows (in this case, the Dow intra-day print low of 7400.3 on September 1) and the panic or crash day of October 16, then the September 1 lows should be broken between Wednesday and Friday of this week. We would say that at this point, any 2 consecutive hourly Dow readings above 7911 at any time this week would negate the potential crash scenario. Once the September lows are broken. it should be down, down, down, down (perhaps a token up day among the 4 or 5 down ones), CRAAASHHHHHHHHH! So you risk 200 points from here to capture 2,000 to 3,000 points or more. Sounds like a good risk-reward ratio to me. csf.colorado.edu