|
PureBytes Links
Trading Reference Links
|
Jim -
This cannot (never say never, but very unlikely) be a b-wave since the
third wave of this move really should not have exceeded 1.618 times the
first wave. It has to be a third wave of a five wave move. I guess it
could be an irregular b-wave for a mega drop, kind of like the top in
1929, but I'll be darned if I'm going to compare and contrast with the
mega-chicken-littles and call for a 90% drop here. Not with
demographics, etc., from l-t perspective.
Steve
---
Steven W. Poser, President
Poser Global Market Strategies Inc.
url: http://www.poserglobal.com
email: swp@xxxxxxxxxxxxxxx
Tel: 201-995-0845
Fax: 201-995-0846
----- Original Message -----
From: <Jpilleafe@xxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Sunday, March 26, 2000 8:47 AM
Subject: [RT] AN END OF HEDGING?
> Collapse in P/C ratios is a concern for me.... Daily Index P/C ratio
was
> below 1.0 last 5 market days of Feb, ahead of S&P500 short term 1409
> high 03-03. Again, ..03-23 Index P/C ratio .894, below the 1.0 level.
> Importantly,....the CBOE Weekly P/C ratio (from Barron's P. MW68) at
> 0.36 (Previous weeks: .37, .35, .36, .36) all very close to my 0.34
threshold
> for market topping level.
>
> This collapse in P/C ratios indicates to me that hedging has
ended,..and
> should be "negative" for equity prices from a contrary perspective.
Weekly
> AAII Survey 65.71% bulls, vs. 20% Bears (ratio 3.29:1) clearly
> "overbelieved".
> Note Consensus 53% Bulls on Bonds (TYX = 5.99%) is upper end vs only
> 21% Bulls on Bonds on 01-21 when TYX = 6.71%. Rally in bonds likely
> extended. Bottomline,..Bond's reversal 03-24 (USM -1^04), with S&P500
> little changed, and Oil price up ahead of Monday's OPEC production
> decision, suggests downside pressure S&P500 likely near term.
>
> Intermediate term,..downside risk appears greater than upside,...I am
open
> minded to "sideways to lower" into April 03, then another leg down
into late
> April or mid-May. Basically this upmove from early March is likely a
B Wave
> of a larger A-B-C correction.
>
> My expectation for a downmove near term is the result of concerns
based on
> seeing big speculation evident everywhere: OTC/NYSE volume at record,
> ..collapse in P/C ratios, Margin Debt surge to record level (again a
chart
> from Ned Davis research on Barron's p.5), narrow leadership, ALL
suggesting
> the current rally off the early March low is "hollow", likely inspired
by
> short
> covering and based on daily measures of sentiment, close to complete.
>
> Barron's (03-27) p.30 "The Morning After" article (worthwhile)
correctly
> notes
> past 5 rate hikes: "..by the time the Federal Reserve raises interest
rates,
> the news is already priced into the market. It's the subsequent
weeks,
> when strong economic new gets released that investors should fear".
Past
> year pattern suggest risk is for a move lower after rally into most
recent
> 03-21
> rate hike.
>
> Would appreciate the thoughts or views of others.
> Have a good week. Regards,
>
|