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Stocks go *boom*...
I'm not a prognosticator. But the pretty pictures that represent the US stock
indexs are fairly graphic. Could we rally right out of this hole and then find
ourselves amazed at the ability of the US market to bounce back time and time
again? Yes. But it needs to happen fairly soon.
The public has increasingly participated in the stock markets. And they have now
been [rightly] conditioned to buy dips. And that conditioning has led to some
incredible creation of wealth. But there will eventually be that day that the
public does wake up and decides that that strategy is not going to work. I don't
know what it will take. I don't know what level we'll be at. We may or may not
be there yet. Time will tell.
Someone said that we need time, as in months, before we know. Perhaps. I guess
we'll know in months whether we knew earlier or were wrong again on this dip.
But as ugly as the charts look and as fast as we have sold off, I have to admit
I expect a selling frenzy to begin, if we are indeed in a bear market, that will
make last Thursday look like an orderly market. Imagine how the pubic will react
IF it decides this ride is over AND it finds it is unable to reach brokerage
firms because they are all busy...and those internet stock inverstors [the
public guy type, not day traders] will be pretty frazzled when they can't log
into the E*whatever trade site.
Are we in a bear market? I really don't know. I know we are in a down trend of
the SPs, at least in the time frame I trade. I know we are in a bull trend in US
ten years and bond and Euros. And the currencies are making interesting signs
that they might have followthrough to the upside--I am trying to give them the
benefit of the doubt.
I hope everyone had a safe and profitable day.
Best,
Tim Morge
Neal T. Weintraub wrote:
>
> What do our back testing gurus say. Is this a correction or the start of a
> bear market? Surely we have enough info. to back test. C'mon it is time to
> put all those gizmos together and give us your best shot. Bull market, bear
> market or correction.
> -----Original Message-----
> From: JParris@xxxxxxx <JParris@xxxxxxx>
> To: omega-list@xxxxxxxxxx <omega-list@xxxxxxxxxx>
> Date: Monday, August 31, 1998 10:26 AM
> Subject: Rapidly changing fortunes
>
> >JAN 1998
> >
> >Corp earnings are expected to grow at 10% to 12% this year . Multiples are
> a
> >little high but the S&P 500 should produce another 20% to 30% gain. Asia is
> >having a little trouble but it was discounted during the Oct correction.
> >Besides, Asia only accounts for 3% of our GDP and our economy looks
> fantastic.
> >In fact, it couldn't look better. There is not a cloud on the horizon.
> >
> >AUG 1998
> >
> >Where the hell did this storm come from?
> >
> >
> >If this keeps up I'm going to have to stop listening to these economic
> >forecasts and develop some trading skills!
> >
> >
> > Jim
> >
> >PS How come a bright guy like Stanley Druckenmiller only has a time horizon
> of
> >3 to 6 months?
> >
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