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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Tai Jin who wrote (16207)	6/6/1999 3:45:00 PM
From: James F. Hopkins	Respond to of 99985

Tai; I see some similarities, and some differences too.. I'm expecting a 10% correcting, but full well know it could be more, I just don't want to "expect" to much until more unfolds. -------------------- Last Summer as we went down on the BK thread I pointed out that while it was serious I did not expect a melt down, as small caps had sold off early. I actually went on record as going long on Sept4th , indeed she did bounce but went back a little lower in OCT ( the indexes did ) but basically the Sept4th was a good call as most of he Blue Chips bottomed, and I doubt many who waited for Oct ever got long below the Sept4th point. ------------------------- Well let me get to the point, I told them all back then that to have a serious melt down we would have to have a small cap run up first, a ha, well we now have got the small cap run up.. AND no I'm not saying that will give us a melt down, but it puts in place one of the requirements and "IF" a storm now hits the tide is high around the houses sitting on thin legs ( floats ) and getting out of them can create a much bigger panic than we saw last year "IF" we go on down below a 12% point your 16% to 26% could be conservative as the fast Mo Mo up in thinner traded stocks can equate to an even Sharper down spike if the point is reached were margin accounts are forced to start selling.. my guess that's about 12% then Mo Mo to the down side will hit like a storm ..and likely to fast to exploit very well. Other than the few who will have cash left to buy some blue chips after the carnage is over. --------------------------- In short if we break a support level that causes margin calls then we dip 10% more on a total percentage base from our high than we did last summer. Unless Spam comes to the rescue of his fraternity brothers and international investment banker cronies again. Why 10% more ? Well two reasons, First; the small caps even in the S&P have done better this last part of the run up to where they were relative to the big caps last July..( some may say that's good ) well it would be good if it had adjusted and happened on the bottom but it didn't As it is they waited to late to make the move up and did so at the expense of the more liquid stocks. So we are up but relatively speaking on stocks with less float than we were last July. Second ; The down side we saw last July was masked a full 10% by the fast drop in the Dollar ..Foreigners saw our market a full 10% lower than we did in fact if you adjust our index SPX to a dollar index to get the bigger picture the volatility of our market has been and is way more than we see. So this time if the dollar don't crash and burn off 10% as fast as the market goes down we will finally see the full impact of what it cost to bail out the LTCM fiasco and line the pockets of the crooks who came in and took her for pennies on the dollar, then with Creemspams aid unwound the holdings at full value. Jim