Board-Ansicht
Mix-Ansicht- DJIA 8100? - Popeye, 26.06.2002, 06:49
DJIA 8100?
The Dow Jones Industrial Average is Getting ready
to Break Down Through 8100 -
By: Marty Weiner
There are 3 stages a bear market goes through following a financial mania. They are first
the Denial Stage, then the Concern Stage, followed by the ferocious Fear and Capitulation
Stage. We called the end of the Denial Stage in the daily comment of 10/9/2000"Adios Denial
Stage", and we could have started the Fear & Capitulation Stage Friday 6/21/02.
We warned our readers about this in the daily comment 6/3/02"Capitulation Phase May be
Near". It is possible that we haven't quite entered this last stage yet since the market rallied
from a tremendous oversold position at the end of the day. We will be monitoring this closely
over the next few days and weeks. The Fear and Capitulation Stage usually does not allow
traders to win both ways by buying oversold markets and selling overbought markets.
Instead, the rallies are very short and are not"believable"
We will also be able to monitor the third stage by observing how much money is flowing into
the bearish funds we are managing, the Comstock Capital Value Fund, and Comstock
Strategy Fund. Believe it or not, with almost all of these daily comments being"on the
money" so to speak, we still have had very little inflows of money into the funds.
This made it clear to us that we were still in the Concern Stage. We are now getting some
interest in the funds and expect to see large inflows of money into these funds during the
Fear & Capitulation Stage. We also expect tremendous criticism when we decide to buy
stocks at the end of this last stage.
The technical picture of the market is continuing to weaken as each area of support gets
penetrated. As we stated above,"oscillators" (which measure overbought and oversold)
don't matter much in the last stage just as they didn't matter in the last stage of the bullish
mania. For example, the NASDAQ doubled from 2500 to over 5000 in the last 6 months of the bull market.
The support areas to monitor are now mostly the post attack lows reached in late September 2001. In round numbers we should
see a test and then a collapse through the low 8100's on the Dow, about 1400 on the NASDAQ, mid 900's on the S & P 500, about
500 on the NYSE Composite, 380 on the Russell 2000 Index, 700 on the IBD 6000 (Investor's Business Daily). And, believe it or not,
the NASDAQ 100 has already penetrated the post attack low of 1100.
Please understand, if you think we are too pessimistic, just exactly how outrageous the valuations were at the peak of this past
bull market, fuelled by public participation never before witnessed in history. Remember, Priceline.com's business was only selling
tickets on airlines over the Internet. They never owned an airplane, or employed pilots, maintenance people or baggage handlers,
yet at their peak they sold for a capitalization level that just about equaled the entire airline industry. If there is any symmetry in the
unwinding of that bubble it could get a lot worse.
<ul> ~ http://www.damonvickers.com/news.asp?id=220</ul>
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