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Given the fact the broad market has been horrible, I see it only puts more
pressure on the managers to buy the very few winners, pushing these even
higher. In january however this won't be the case anymore...
Anyone any views on the mega short position of commercials on the SP. As i
understand its a 13 year extreme short position against... long small
speculators only. Troublesome. Yet when I look at the nasdaq100 I can see
3800 after a little 4 a a little 5 at a minimum to conclude our October 99
rally.
Concerning bonds, I believe they are highly correlated to stocks. As soon as
stocks will cool, I am convinced bonds will improve. At 9020 the last low,
the current move from 9420 (already a nice 5 waves structure) will also be
equivalent to the november pullback from 9610 to 9210, which makes a nice
case for a B wave down with a larger 4 as Earl mentioned. C would move back
in 5 steps to about 9420 to 9600.
Gwenn
Earl Adamy wrote:
> I generally concur with your comments with one exception. I believe a
> hope of a Fed bias change led Tuesday morning's bond rally and the
> failure to change bias resulted in the sell-off. Bonds are looking for
> something/anything which will slow the after burners on both the stock
> market and the economy. Given the strength of the speculative rally, I
> consider the Fed's failure to change bias to be a strong expression of
> concern regarding Y2K issues i.e. Fed Y2K intelligence indicates that
> the problems will be more severe than anticipated by the public and the
> markets.
>
> I would also note that my NYSE and NASDAQ breadth oscillators are
> improving slightly and the big/small cap spread is improving so we may
> be seeing early signs of broadening. Overall, however the weekly breadth
> oscillators remain in the worst shape they have been in at this time of
> year in several years.
>
> Earl
>
> ----- Original Message -----
> From: Steven Poser <poserglobal@xxxxxxxxxxxx>
> To: <realtraders@xxxxxxxxxxxxxxx>
> Sent: Wednesday, December 22, 1999 6:10 AM
> Subject: [RT] Re: [Treasury Bonds]
>
> A drop below 90-22 on the March futures opens us to the 90-00 area. If
> we do
> not see a large and fast rally from there (which I slightly prefer to
> take
> yields back to near 6% again), we are in VERY VERY BIG TROUBLE. That is
> bonds
> could go straight to 6.75-7.00%.
>
> I think the Fed made a mistake this time around in not changing the bias
> although I suspect the market is missing the point. The Fed is scared of
> bursting the stock market bubble and is trying to manage stocks so that
> they
> move slightly higher or slightly lower to prevent major dislocations.
> This is
> a feat that may not be doable. They felt, and possibly rightly so, that
> changing the bias to tightening would cause the same problems as
> changing
> rates themselves (sharp drop in the markets just in front of Y2K). The
> only
> problem with that thinking is that the market already assumed that the
> Fed
> would: 1) Not change rates, 2) Change the bias, 3) Increase rates in
> February
> AND March.
>
> Now, the Fed has signaled that it is SCARED of the stock market bubble.
> With
> that in hand, there is a CHANCE that the bulls just trample the bears. I
> am
> not sure that I really see this in the charts right now, but if we do
> not
> start a 5-8% correction real quickly, that is exactly what will happen.
>
> Nothing has changed between yesterday and today (despite certain shrill
> calls
> for Greenspan's lynching elsewhere) as far as the Fed's policy goes. It
> is
> just the fact that stock market traders' are not based in reality. That
> is
> going to change by next year. I do not know if it happens now, in Q1, or
> Q2,
> but I will be absolutely amazed if the S&P 500 does not get very close
> to, if
> not below, 1100/1000 before 2000 is out.IT could see 1500/1600 first
> though.
>
> By the way, the idea that there will be blood in the streets is, though
> not
> impossible, about as likely as Al Gore getting a personality. Most
> mutual
> funds are little changed or down this year. The "smart money" is at
> great
> risk. But guess what, those are mostly the richest anyway. The average
> "Joe"
> is making a little or losing a lot right now in the stock market. If the
> S&P
> crashes, Wall Street will grind to a halt, consumer confidence will drop
> and
> the rest of the country will keep going. Most stocks are far off their
> highs.
> 52-week lows on the NYSE are 5-10 times as large as 52-week highs on a
> daily
> basis. The "market" is not going up. CSCO, GE and a few others are
> carrying
> the indexes. The rich are getting richer and the poor are getting
> poorer.
>
> I would not be at all surprised to see market breadth stay steady or
> even
> improve as the stock market drops (if it does not happen in a panic). We
> will
> see lots of money lost, but as CSCO, GE, Red Hat, etc deflate, you will
> see
> some money start trickling into companies that make profits and have
> fractions
> of these valuations all over the big board. No, it will not be blood in
> the
> streets, it will be known as the year of the mutual fund manager that
> beats
> the index! And, Alan Greenspan will get his rightful place in history as
> being
> the man that THREE (1987, 1998 and 2000) times prevented global
> financial
> disaster and as possibly the greatest market thinker in history.
>
> Steve Poser, President
> Poser Global Market Strategies
> http://www.poserglobal.com
>
> "Dr. John Cappello" <jvc689@xxxxxxxxxxx> wrote:
> To T-Bond Afficionados:
>
> Need some insight as to potential bond price movement [direction and
> range]
> over the next 30 days as you see it.Just looking for some understanding
> since some of the factors I used to look at do not seem to matter any
> more.
>
> Thanks for any info,
>
> John
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