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<font size=3>Gitanshu,<br>
<br>
Great post. Welcome back.<br>
<br>
Just one comment with respect to the NDX percentage declines that
you attached to your post: Notice the symmetry of magnitude of each
of the last 5 declines....all nearly 12%. A classic case of
Symmetry Wave, a favorite of mine. Based on this method, as a
market declines, it has the propensity to find support at previous
magnitude declines (in this case the 12%). Unfortunately, as this
'structure' continues to mature and repeat/extend itself, it (the
structure) becomes less capable/reliable of holding those symmetrical
relationships. And as such, leads to failure. Note, this
structure is very mature with a 10 waves count.<br>
<br>
Once the structure fails, one would look to the next larger
symmetrical wave structure to find support. In this case, it would
be the decline ending 10/8/98 which measured 22.99%. When you
calculate the leeway of +/-20% (22.99 x 20% = 4.6%), you get target
decline of 18.39 - 27.59% in which you would find additional symmetrical
support.<br>
<br>
Please note, I am <b>not </b>now forecasting a top in the NDX but
rather just identifying support zones in the event a substantial decline
should begin. Thus, allowing for preparation of my portfolio using
an early entry method to go long the NDX and corresponding stocks when,
and if, the market enters into a decline measuring 18.39% (22.99 - 4.6 =
18.39). Personally, I am still long many of the techs that have
been advancing at an astounding rate, but have been cutting my positions
in half to thirds because of this exponential growth that we are seeing
in stock prices. Sure, I could make more money, but for the last 2
years, I have been riding this technology wave and now I am starting to
get some nose bleeds. As a matter of fact, just the other day I was
in the shower washing my hair and to my surprise, my nose just started to
bleed...it was a mess. <br>
<br>
Anyhow, you had a great post. Just thought I would add my 2
cents.<br>
<br>
John Boggio<br>
<br>
<br>
At 05:14 PM 2/26/2000 -0500, Gitanshu Buch wrote:<br>
<blockquote type=cite cite>Hello everybody:<br>
<br>
I've been on hiatus from the US for the past month, and missed most of
the<br>
fun you've been having.<br>
<br>
I come back to The Land Of Opporunity to find CNBC flashing bad Fridays,
bad<br>
Januaries, bad close below 10k, bad yield curve all in the same
breath.<br>
<br>
Allright, I admit it:<br>
<br>
I don't know what to make of the "MARKET RULES" at all:<br>
<br>
Utility stocks go up as bonds go down.<br>
<br>
Banks fall as bonds rally.<br>
<br>
Walmart falls off a cliff due to a supposedly tightening Fed, but Costco
and<br>
The Gap each tack on a 10% gain. Even Cramer gets that time-tested
equation<br>
wrong for the day.<br>
<br>
Dow does its 20% = correction thing, NDX goes to new highs.<br>
<br>
America watches foreign stock indices rally even as the Dow falls, and
fear<br>
asset reallocation; but the foreigners watch the NDX and take off because
of<br>
it.<br>
<br>
In Hong Kong, the Police are brought in by HSBC to control the
application<br>
frenzy for a dot com IPO that has no business plan, no customers, and
no<br>
finances but is being floated by a "savvy business tycoon".
Reminds me of a<br>
similar company floated in the South Sea Bubble - no disrespect to
the<br>
"savvy business tycoon" - no wonder to me that he is a tycoon
and will<br>
remain so.<br>
<br>
Meantime - Unilever, the world's largest consumer goods company lays
off<br>
25,000 people citing profit-expectations pressure from The Street,
and<br>
elevates the Indian subsidiary's CEO to their global Board coz that<br>
subsidiary keeps tacking on growth after growth... in the face of
price<br>
competition, regulatory competition, P&G competition, Colgate
competition...<br>
and while the Indian subsidiary does have the largest market cap in
the<br>
Indian stock market, its parent flounders as its market value equals that
of<br>
Gillette, a company one-fifth its size - or looked at it from US<br>
investor-looking-out, its market value is one-fourth that of P&G, a
company<br>
20% smaller than Unilever and growing half as fast as Unilever in the
same<br>
businesses worldwide.<br>
<br>
The yield curve inversion gains traction signalling a slower economy
ahead,<br>
but the stable cyclicals, drugs and consumer stocks (which are supposed
to<br>
rally when an economy threatens to slow) fall huge anyway.<br>
<br>
Janus, the God of Growth, gets into Value. Their prospectus says
"those<br>
stocks that the market is wrongly abandoning". Huh? Wonder what
happened to<br>
"the market is always right"... and I wonder if the use of the
term<br>
"Strategic Value" in its title is a licence to underperform for
extended<br>
periods of time.<br>
<br>
So now that everyone expects mean reversion in the form of NDX falling
down<br>
and others going up - or some combo thereof whereby this divergence
is<br>
resolved into harmony, I ask myself: Just what are we looking at?<br>
<br>
Folks, it turns out that the NDX has had ONE 20% correction since the
last<br>
acknowledged "recession" in 1990.<br>
<br>
A rally-decline chronologue is attached for your weekend reading
pleasure.<br>
Data starts from 1/2/90, and choice of that date is purely
economics<br>
fundamentals based = subjective.<br>
<br>
And maybe I'm looking at wrong data, but the COMPX, the larger
universe<br>
Nasdaq index cousin, hasn't even had that 20% correction since the
1990<br>
recession.<br>
<br>
I dig a bit deeper into the "narrow technology market with its
pathetic<br>
advance decline line", and find this gem contributed by Lazslo
Birinyi:<br>
<br>
"48% of the stocks in the Nasdaq market gained an average 330% in
value for<br>
1999.<br>
<br>
Of this,<br>
- Half (24% of total market value, represented by 474 stocks) gained
an<br>
average of 504% with a median gain of 383%.<br>
- Half (24% of total market value) gained an average of 155% with a
median<br>
gain of 151%."<br>
<br>
Ah well. That was 1999.<br>
<br>
Even today, the smallest of the top 100 of Nasdaq's % gainers for the
past<br>
running 12 months has a market value over $150 million, and Rank # 100
has a<br>
gain of 840% for this 12 month period ended Friday 2/25/00.<br>
<br>
I use rolling 12 months in that statistic since IBD uses rolling 12
months<br>
in its famous RS calcs.<br>
<br>
By comparison, Rank #100 in the SPX gained 21% in the same period. SPX
Rank<br>
#1 gained 1363%, no prizes if the word Qualcomm comes to mind.<br>
<br>
Qualcomm is Rank # 41 on the Nasdaq ranking of % gainers.<br>
<br>
The numbers, thus, are hardly what I would call a "narrow
market". and I<br>
imagine this once, non-index funds did much more for their investors
than<br>
index funds by a wider margin of participation - regardless of what
the<br>
folks at Vanguard would have me believe re the perils of not indexing.
In<br>
mony management, clients take away your money if they see someone else
doing<br>
better. Even for a year.<br>
<br>
So even if we're looking at the well stated bear case re 20%
corrections,<br>
revisiting 1998 lows, not-yet-a-panic-bottom, mean reversion, bad
breadth,<br>
et al - to my mind there remain atleast as many opportunities to make
a<br>
fortune being long in this market as there may be being short.<br>
<br>
Words from an old Louis Armstrong song come to mind:<br>
<br>
I think to myself<br>
What a wonderful world...<br>
<br>
I have no idea re the short term pulse of the trading market.
Strategically,<br>
it seems to me that abandoning technology now would be an error of<br>
catastrophic proportions to the institutional - and thus - the
individual<br>
investor.<br>
<br>
It still remains a game of buying the advancing stocks and selling
the<br>
declining stocks.<br>
It still remains a case of a liquid individual investor waiting to buy
the<br>
dip, with 2x more money going into money market funds than equity funds -
as<br>
has been seen consistently since 1994.<br>
It still remains a strategic US and Global bull market for equities,
albeit<br>
a confusing one if one is married to any particular philosophy of
analysis.<br>
It still remains one where the relative outperformance of overseas
benchmark<br>
indices may continue for 2000. I vividly remember Earl picking up on
this<br>
trend way back when Asia was still a bad 4 letter word.<br>
<br>
Just as these "Membership To This Club Starts at +840%" are
becoming bad 4<br>
letter words.<br>
<br>
I wish I could say that my portfolio went up 840% in the past 12
month<br>
rolling period... and that simply says that the market gave me at least
100<br>
opportunities to get in that I did not capture. That's like one
opportunity<br>
every 2 trading days.<br>
<br>
Pathetic.Instead of adding value to my portfolio, I The Trader
depreciated<br>
it.<br>
<br>
The above may not help you trade Monday morning. But this set of<br>
observations comes from the perspective of someone who did the odd
buy-this<br>
sell-that trade and mostly stayed away from the markets for a whole
month.<br>
<br>
Gitanshu<br>
</font></blockquote><br>
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</x-html>From ???@??? Sun Feb 27 21:35:28 2000
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From: "James Taylor" <jptaylor@xxxxxxxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Subject: [RT] The US Government is Reading Your E-Mail and Scanning Your Phone Conversations
Date: Sun, 27 Feb 2000 21:24:42 -0800
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<BODY bgColor=#ffffff><FONT size=2><FONT size=2><A
href="http://www.time.com/time/digital/daily/0,2822,27293,00.htmlhttp://www.aclu.org/echelonwatch/index.html";><FONT
size=2>
<DIV><EM><FONT color=#000000 face=Arial size=2>On Sunday February 27, 2000 CBS
60 Minutes aired a segment detailing the NSA (National Security Agency's highly
secret intelligence gathering system, Echelon (code word for an automated
global interception and relay system). The system was shown to be able to
scan a large portion of telephone conversations and is believed to intercept
over 90% of all internet e-mail transmissions.</FONT></EM></DIV>
<DIV> </DIV>
<DIV><FONT color=#000000 face=Arial size=2>
<DIV><FONT face=Arial size=2>Read About How Your Privacy is Being Unknowlingly
Violated Each and Every Day</FONT></DIV>
<DIV><FONT color=#0000ff
face=Arial>http://www.time.com/time/digital/daily/0,2822,27293,00.html</FONT></DIV><FONT
face=Arial><FONT color=#0000ff>
<DIV>http://www.aclu.org/echelonwatch/index.html</A></DIV>
<DIV><FONT color=#000000 size=2><A
href="http://jya.com/crypto.htm";>http://jya.com/crypto.htm</A></FONT><A
href="http://www.time.com/time/digital/daily/0,2822,27293,00.html";></FONT></DIV></A></FONT><A
href="http://www.time.com/time/digital/daily/0,2822,27293,00.htmlhttp://www.aclu.org/echelonwatch/index.html";>
<DIV><FONT face=Arial size=2></A><A
href="http://jya.com/nsa-elint.htm";>http://jya.com/nsa-elint.htm</A><A
href="http://www.time.com/time/digital/daily/0,2822,27293,00.htmlhttp://www.aclu.org/echelonwatch/index.html";></FONT></DIV>
<DIV> </DIV>
<DIV> </DIV></FONT></DIV>
<DIV><FONT color=#000000 face=Arial size=2><EM>When the NSA (who has come under
increased government scrutiny over its invasive practices) learned that 60
Minutes would air the program, they submitted the following letter to
Congress:</EM></FONT></DIV>
<DIV>
<DIV><FONT face=Arial
size=2>http://www.fas.org/sgp/news/2000/02/nsalet.html</FONT></DIV>
<DIV> </DIV>
<DIV> </DIV>
<DIV><FONT color=#000000 face=Arial size=2>In the letter, the NSA states that
they would be happy to help quell the fears of US citizens that their privacy is
violated by offering to send them detailed information on NSA actions in
accordance with the Freedom of Information Act.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT color=#000000 face=Arial size=2>A highly knowledgable citizen
followed the legal procedures to acquire these details.</FONT></DIV>
<DIV><FONT color=#000000 face=Arial>The run-around and denial of that
information is contained in this link.</FONT></DIV>
<DIV><FONT color=#000000 face=Arial size=2>
<DIV><FONT face=Arial size=2></A><A
href="http://jya.com/nsa-foia-req.htm#appeal";>http://jya.com/nsa-foia-req.htm#appeal</A><A
href="http://www.time.com/time/digital/daily/0,2822,27293,00.htmlhttp://www.aclu.org/echelonwatch/index.html";></FONT></DIV></FONT></DIV>
<DIV> </DIV>
<DIV><FONT color=#000000 face=Arial size=2></FONT> </DIV>
<DIV><FONT color=#000000 face=Arial size=2>Be aware. </FONT></DIV>
<DIV> </DIV></FONT></DIV></A></FONT></FONT>
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</x-html>From ???@??? Mon Feb 28 01:04:34 2000
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Status:
That is all very true, but timing is very obscure. I've observed this for 3
years now, and we just doubled or so in that period. Don't know what to do with
that now. It will eventually be otherwise, but when and how? Don't know.
Gwenn
Marlowe Cassetti wrote:
> Interesting phenomenon. There was an old saw on wall street "When you start
> getting stock tips from your cab driver, the market has reached a top." I
> recall the summer of 1982 when I was so excited that the long secular bear
> market was coming to an end. Nobody I talked to was interested. Buying
> stocks was poison to people who were badly burned in the long stock market
> decline. There were much more excited as to who was offering double digit
> CDs.
>
> I recently met with a good friend. A smart man, PhD in Engineering, and on
> the facility of a university. He was describing how he rolled over his 401k
> to a stock broker with a major brokerage firm. He was not happy with the
> performance of his stock mutual funds in his 401k. His eyes lighted up and
> he delighted to declare that his broker was buying stock. He stated he was
> so excited and couldn't wait to see the results of this brilliant broker.
> As I said he is a smart man, but somehow he too is caught up with the craze
> that the stock market is the path to immense wealth.
>
> ----- Original Message -----
> From: <Jpilleafe@xxxxxxx>
> To: <realtraders@xxxxxxxxxxxxxxx>
> Sent: Sunday, February 27, 2000 2:43 PM
> Subject: Mainstream Psychology?
>
> > <A
> HREF="http://www.usatoday.com/money/stocks/mutual/mutdex/dmut033.htm";>Risk
> > -taking investor raises target</A>
> > or....http://www.usatoday.com/money/stocks/mutual/mutdex/dmut033.htm
> >
> > Here is a USA today story about a fellow who
> > in the Fall of 1998 met his $23,000 margin call
> > with a personal loan and a equity line of credit loan
> > on his condo,...preferring to keep his portfolio of
> > stocks intact.
> >
> > Interesting from the point of view that this is
> > what mainstream America reads,..and likely
> > is growing to accept as the norm.
> >
> > Regards, JIM
> >
> >
> >
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