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[RT] GEN: Parabolic Patterns, Bear Markets - Final 1 of 2



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-----Original Message-----
From: Gitanshu Buch [mailto:OnWingsOfEagles@xxxxxxxxxxxxx]
Sent: Sunday, April 16, 2000 8:13 PM

Here are 4 contradictory charts.

The visual appeal is drawn to the obvious comparison with Nikkei, 
1990's parabolic implosion.
The number crunch is drawn to how much more oversold it can get 
before a snapback rally of giant proportions begins.
The more hopeful appeal is drawn to Morgan Stanley Capital's All 
World Equities index, and the Hang Seng experience.

All patterns are tradable.

Personally it is very rare that I would hold positions for all 
these years that it takes parabolic moves to unwind. My trading is 
more tactical, and less strategic as these past emails have been.

I am also very hesitant being short of markets that have a natural 
upside bias, preferring instead to be short of individual 
securities as and when chart patterns indicate distribution of some sort.

But after a week like the last one, it helps to step back and 
attempt to look at the big picture.

After all, we may live in a New Economy and make our choices based 
on what works now.

But then, there is still the primal message of 1000 years of 
recorded commercial history of greed, fear, money changing hands, 
old money, new money, new money becoming old money, old money 
remaining old money - and that sin we call speculation.

If the Nasdaq was being touted as oversold on commercial TV back on 
Monday, I wonder what it is now.
If the Nasdaq was being propped up by BigFoot, Small Foot, Mutual 
Fund Manager XYZ, I wonder what will prop it up once their 
firepower is gone.

I want to not believe that the bigger funds (> $10 billion assets) 
are so naive as their marketing profiles make them out to be. At 
this young age and this small portfolio I have come to appreciate 
the hedging power of derivatives. I am sure that they, with their 
bigger better and faster risk management departments can and do 
defend their positions like you and I small investor do - even 
though the average mutual fund chart doesn't currently reflect it.

I want to not believe that this incredible global bull market in 
equities is over - the MSCI World index does not show it to be as 
terminal as the Nasdaq shows it to be over.

I want to not believe that when I am told that the money management 
business is putting me in competition with some of the brightest 
minds in the world, I am being told that I am brighter because I 
can see the obvious.

It gives me no pleasure to be short the market and see 401ks get 
rechristened 201ks.

Or maybe it will be as Jeff Cooper said on Thursday before the 
Friday crash: 

Whoever heard of a dead gorilla bounce?

Gitanshu

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