Re: [CANSLIM] Market psychology

From: "zillagirl" <zillagirl@email.msn.com>
Subject: Re: [CANSLIM] Market psychology
Date: Tue, 23 Jul 2002 22:42:24 -0700
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read an interesting article tonight about a couple of market problems in
Europe like our CEO - giant charges off for bad loans and the like-the
author feels like there is a good chance that when the European markets
start getting more of this kind of thing it might stabilize our markets.  A
small lifeboat in the ocean tonight but something to cling to maybe. zilla
- ----- Original Message -----
From: "Bill Triffet" <btriffet@earthlink.net>
To: <canslim@lists.xmission.com>
Sent: Tuesday, July 23, 2002 3:52 PM
Subject: Re: [CANSLIM] Market psychology


> Katherine,
> You beat me to the phrase,"The market can scare you out or wear you out".
I
> guess this time it will wear us out (did for me - been out for several
> months now). Also, the element of the secondary contrarian indicators
> signaling a bottom was brought up in today's IBD backpage editorial. To
> paraphrase: "If everyone's a contrarian, where are we left"? Everyone's
> quick to jump on each move of the put-call ratio. Also made note of the
fact
> that fund managers have had a hard time liquidating the huge numbers of
> stock shares in this market. They kill every new rally trying to dump a
few
> million more shares.
>
> Maybe the last bull made too many canslimers of us. Perhaps we need some
to
> convert to "value" selection to take the ball for a while?
>
> -Bill
>
>
> ----- Original Message -----
> From: "Katherine Malm" <kmalm@earthlink.net>
> To: <canslim@lists.xmission.com>
> Sent: Tuesday, July 23, 2002 1:44 PM
> Subject: Re: [CANSLIM] Market psychology
>
>
> Interesting perspective, isn't it Jon?
>
> While history doesn't always repeat verbatim, little changes in human
> behavior. I think those two significant Bears ended once everybody was
bored
> to tears with the market. What is the saying?.... "sometimes the Market
just
> wears you out...." :)) Add that to Bill K's comment about needing several
> months to find a bottom and you've got the makings of new Market
> "potential."
>
> Katherine
>   ----- Original Message -----
>   From: J. Lobatto
>   To: canslim@lists.xmission.com
>   Sent: Tuesday, July 23, 2002 3:14 PM
>   Subject: Re: [CANSLIM] Market psychology
>
>
>   Katherine,
>
>   Thanks for that reply. Very interesting to note that the two most
> sustained bears of the century did not end on obvious capitulation.
>
>   Jon
>     ----- Original Message -----
>     From: Katherine Malm
>     To: canslim@lists.xmission.com
>     Sent: Tuesday, July 23, 2002 4:11 PM
>     Subject: Re: [CANSLIM] Market psychology
>
>
>     Hi Jon,
>
>     Here's a point of view on the notion of capitulation from an excellent
> technician and market veteran, John Mendelson. It's awfully hard to say
how
> the market will find its bottom, and it's very possible that we may get
some
> "false" FTD's. But I do know with certainty that there will be no
> sustainable upturn *without* a FTD.
>
>     Katherine
>
>     =========
>
>     Weekly Market Analysis
>
>     John A. Mendelson
>
>     July 23, 2002
>
>     A View Of The Market
>
>     Some Recent Questions From Clients:
>
>     Do you expect to see a capitulation by investors before this decline
> ends?
>
>     The prospect of capitulation, or a climatic downward trading spike
that
> exhausts the selling,
>
>     appears to be very much on the minds of many, particularly the
financial
> press. The "need" for this
>
>     has been mentioned in numerous articles.
>
>     First of all, nobody knows for sure if this event will occur. We have
> clearly seen an
>
>     acceleration of selling in the last two weeks that has moved the
market
> to an extreme extended or
>
>     "oversold" position. In this regard, 99% of the stocks in the S&P 500
> (SPX - 820) are below their
>
>     ten-week average, a higher percentage than September 2001 or October
> 1987. Furthermore, actions
>
>     reflecting investor sentiment such as the CBOE Put/Call Ratio, the
> ten-day average of the Arms
>
>     Index (TRIN - 1.67) and the NASDAQ Trin (TRINNASD - 0.62), measures of
> buying and selling
>
>     pressure on the market, and my proprietary "Diaper Indicator" all are
at
> or near historically extreme
>
>     levels, as is the CBOE OEX Volatility Index (VIX - 48.23).
Furthermore,
> NYSE short interest is
>
>     now the highest in history and the dividend yield on the S&P 500 is
> higher than that of six-month
>
>     U.S. Treasury bills, a most unusual event in modern times.
>
>     My point is that one might say we have already had a "capitulation." I
> would also note that
>
>     the 1973-1974 bear market, the worst I ever saw, ended on October 3,
> 1974 with a "whimper, not a
>
>     bang" after twenty-one months of slow death on low volume.there was no
> capitulation. In
>
>     addition, the 1929-1932 bear market bottomed on July 8, 1932 on volume
> well below many days in
>
>     the prior two months. Who knows? . my personal view is that investor
> capitulation is not
>
>     "needed" to form a bottom and that many sentiment indicators are at
more
> extreme levels than at
>
>     previous historic lows.
>
>       ----- Original Message -----
>       From: J. Lobatto
>       To: canslim@lists.xmission.com
>       Sent: Tuesday, July 23, 2002 2:59 PM
>       Subject: [CANSLIM] Market psychology
>
>
>       All the professionals are looking for a massive capitulation day to
> mark the termination of this bear market (i.e. an obvious panic day when
> they can start pouring money in). Using the fact that the market rarely
> satisfies the majority of participants, I suspect that the professionals
may
> not get their wish. As such, one other scenario comes to mind:
>
>       The market continues this relentless water torture for an
> indeterminate amount of time and finally the bear market ends at some
point
> with a whimper barely noticed by anyone, that is a new low is made on a
> fairly "normal" day and the market starts climbing back up the next day,
> either A) explosively or perhaps B) gently and imperceptibly and basically
> doesn't look back from that day on.
>
>       Any other non-capitulation scenarios that any of you can come up
with?
> The reason I ask is that with my "B"scenario, we may not get the FTD day
> that will ring the bell for us either.
>
>       Jon
>
>
>
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