Grizzly's Growlings Back Issues Monday Morning Market Musings 08/10/98
For the third straight week, Asian markets are down broadly and sharply to open the trading week. As we go to press at 1:00 a.m. EDT Monday morning, Singapore, Thailand, Malaysia, and China are all down more than 2.5%. Japan is off about 1%. The implosion continues. A brief bright spot is Hong Kong, which is showing a 1% gain after being battered down to new lows last week.
Of Crashes and QuakesThe DJIA continued to wilt last week like a rose in Texas. (See Tuesday's Special Report.) The bounce off Wednesday’s 8362 low was definitely nothing to brag about for the bulls. Short-terms indicators remain very oversold, and Friday afternoon’s 150 point intraday drop from 8710 shut down the rally like a sacked quarterback.
Bulls received the reassurance they were looking for following Tuesday’s 300 pointer to the downside. Bull guru Abby Joseph Cohen reiterated that everything is still cool and under control. Don’t worry, be happy. Just follow the gold watch and repeat after me: "Buy the dips. Buy the dips. Buy the dips...."
The Russell 2000’s 9+ point gain on Friday was cited by many as proof that the rally was broadening and extending. Hardly. It’s just that the RUT came up out its rut for a breath of fresh air. Elliotticians call it a brief wave 2 counter-trend pause. Sadists call it a dead cat bounce. Grizzly calls it a shorting opportunity.
Stock market crashes are a lot like earthquakes – they don’t happen very often, they’re difficult to predict, and when they hit, those affected become confused, injured, and angry. Yet with enough seismic sensors in the ground, the rumblings can be detected.
Be on the lookout for a magnitude 7.5 shaker on The Street.
Grizzly
Please read the disclaimer.