2 replies to this topic

[A-ha]

http://xtrends.blogs...ield-curve.html

Edited by xD&Cox, 01 March 2007 - 11:23 PM.

[arbman]

What would change your opinion that this is a correction or a short bear market? Appreciate your opinion...

[A-ha]

First of all, when I say initiation of the bear market, I mean the first trust move. But the fact that even the trust moves can get retraced. Nothing goes straight down or up, we will get a death cat rally, probably sharp and strong enough to give the impression that things are back to normal. Even test of highs are possible in my opinion. S&P500 dropped from 1461 to 1381, 80 freaking points in a few days ! Do you remember how long it took S&P to drop 80 points from 1320 to 1240 last year? You see the difference? That was a corrective move , not a trust. But severity of that decline also carried implications of something unholy for the bull market. Regardless, it was not the move that belonged to a different market but bull market. However this one is different. Now to answer your question, first of all, S&P must shoot back up to make new highs as fast as it dropped, that will help to repair the pattern. Which is impossible given the current facts. Another thing is there must be a new leadership. The leading indices and sectors (OEX, Reits , ...) lost their leadership weeks ago. Who is going to lead, Semis? Also if we were soft landing, growth oriented sectors should be stronger than this. Semiconductors have been in a bear market for 12+ months. Intel just broke below its lifetime trend and headed to 12, that is the bear market low. Why these stocks miserable. There are fundamental problems but the root of all is economy and coming recession. So it is almost gurantee that if we are going to get a bear market, Semiconductors will be the first sector to test their 2002 lows. What does it tell you is that we are in a secular bear market that was corrected between 2003-2007, 4 year? Sounds familar?

Edited by xD&Cox, 02 March 2007 - 01:44 AM.