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[Tor]

I dont fully share this view, and think some more downside required st. I am overall bullish and in fact very bullish in year end but for now i just "sit it out". Market Watch: A Slope Comes Into View 8/3/2007 4:42:33 PM Stock markets closed sharply lower today, Friday, August 3, 2007 by Alan Hall Have you ever felt that pang of fear and uncertainty when you realized you turned into the wrong part of town? In the movie, "Bonfire of the Vanities," Tom Hanks' character Sherman McCoy took that wrong turn, and it marked the absolute peak of his Wall Street career as a "master of the universe." Tom Wolfe chose an apt metaphor for his story about the stock market, because at peak turning points, a confident vision of the future melts into uncertainty. As you well know if you've been reading our content for long, we've consistently talked about a few main themes. First and foremost, we've described the way social mood moves in patterned waves, collective oscillations between optimism and pessimism. This shared opinion is the engine of the stock market, and we think it's also the engine of history. We've steadily described the significance of how the social/financial environment displays historic over-valuation, extreme bullish sentiment, complacency, embrace of risk, opaque financial engineering and obsession with luxury assets. We were the first to comment on the unprecedented "all the same markets" scenario generated by the flood of easy credit provided by willing banks and governments. But now, the first domino has fallen with surprising speed. Low-income, first-time U.S. homebuyers have swept the legs from under the hedge-fund masters of the universe. Even Tom Wolfe couldn't have dreamt up more irony. Investors now understand they can't determine who has lost what on subprime bets, or anticipate "potential losses that many fear have been hidden in the books of financial firms, or stuffed in off-balance-sheet vehicles."(Today's Wall Street Journal) So they are bolting for the exits in "better-safe-than-sorry" mode. The just-published August Elliott Wave Financial Forecast shows six charts that belie Wall Street CEOs who deny a crisis. The charts show the speed with which a "vast amount of the paper" held and sold by hedge funds and investment-banking firms became worthless. EWFF describes how hedge fund models are failing due to the collapse of confidence. "One fund manager [said], 'the models work when they look at history, but not when history is all new.'" "Wall Street's armies of 'mathematicians, hedge fund wizards and programmers' are not even dimly aware of how dependent their schemes are on the ocean of liquidity created by the bull market." This issue is packed with things you should know, such as which major average broke below a five-year trend-channel support line, and the significance of Business Week's recent morbid cover, and what happens when foreigners buy record amounts of U.S. equities. You won't hear EWFF's viewpoint anywhere else. We've long described the descent into a bear market as a "slope of hope." Prepare to see the same "buy-the-dip" mentality you did in 2001 for a long while yet. With an independent perspective, you can be one of the few who view the slope for what it is.