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Grizzly's
Growlings Back Issues
Monday
Morning Market Musings 11/09/98
"These are the
times..."
With apologies to Thomas Paine, "these are the times that try Bears’ souls."
The DJIA couldn’t quite crack through 9,000 on Friday but nonetheless it capped another impressive week. The countertrend rally from the October 8th low has taken an eternity to complete. It has extended far beyond the September-October crash window. It has perturbed and perplexed us.
Is the Great Bear Market over? If so, according to Jim Stack of InvesTech Research, it would be the shortest bear market in history at just 45 days. Don’t bet on it.
The outlook remains the same, as we summarized last week :
Despite, or more precisely because of, the 1200 point rally since October 8th, the case for an imminent and massive crash really hasn’t changed. The precise timing of such an earthquake has always been the question. All is still according to plan, as described in Frost & Prechter’s Elliott Wave Principle, page 68: "Second waves often retrace so much of wave one that most of the profits gained up to that time are eroded away by the time it ends." That’s an understatement, guys! This ongoing bear market rally has been excruciatingly painful. It is accomplishing its goal of shaking the confidence of weak bears and re-encouraging the bulls.
US stocks remain on FULL CRASH ALERT!
In the most significant economic news of the year, the Commerce Department reported US consumer savings in September plunged to a negative level for the first time in 65 years; the depths of the Great Depression. Yet stocks are back within striking distance of record highs and the economy still seems to be chugging along. What's wrong with this picture?
John Crudele is still hot on the trail of the Fed’s alleged Plunge Protection Team. Here’s his latest piece of detective work: [article deleted].
The Great Bear Market for the Republican Party has begun. Their extremely poor showing at the polls last week may mark the beginning of the end of the Grand Old Party.
By far the most significant results were in Minnesota, yet the Democrats weren’t happy with the outcome there either. Only in America could a former professional wrestler become governor of a state. Running as the Reform Party candidate, Jessie "The Body" Ventura reincarnated himself as Jessie "The Mind" and defied the pundits in sweeping to a major upset victory.
Yet Ventura is much more than Ross Perot on steroids. Ventura capitalized on the people’s disgust with both major parties like Perot never has. Ventura pitched a unique libertarian-populist message of lower taxes, lower spending, and getting government out of their lives and out of their faces that really struck home with the voters.
As the Great Bear Market takes hold in politics as well as economics, look for many other breakthroughs from the Reform Party as well as the nation’s third largest party, the Libertarians. With Ventura’s victory in Minnesota, conventional wisdom has been crushed and all political bets are off. Ventura won’t take office for another two months, yet already there’s a committee to draft him to run for president in 2000. Stranger things have happened. Remember that former actor turned governor, Ronald Reagan?
Saturday marked the 81st anniversary of the Russian Revolution. Since 1917, the Great Soviet Bear has never yielded to the Bull, save a few brief moments that envisioned fulfilling the country’s vast potential.
The Russian people marked the occasion by protesting and demanding the resignation of President Boris Yeltsin. Yeltsin marked the occasion relaxing and recuperating at a luxurious Black Sea resort. That "cold" just won’t go away. False rumors of his death zipped across the Internet.
The Clinton administration marked the occasion by donating 3 million tons of foodstuffs, a token drop in the bucket. It was time anyway to rotate the inventory at the US government surplus warehouses, so might was well just ship it out of the country.
News reports claim that many Russian peasants are surviving on just $5 a month. For the Russian people, the situation can only be described as desperate. Life isn’t at all pleasant when Blood in the Streets is within sight. Get up to the minute news and the inside story on the historic ongoing events in Russia at www.russiatoday.com.
Things aren’t looking much better in Japan. Industrial giant Hitachi reported its first post-World War II loss, and it was a whopper; nearly $1 billion in the red. The Nikkei 225 Index has been stuck around 14,000 for the last four month, despite recent optimism over minor banking reforms. With long-term interest rates shivering just a few degrees above Absolute Zero, the Japanese economy needs an intravenous injection of antifreeze. A heat wave is not in the forecast, either.
Hurricane Mitch was in the forecast, but the extent of its tragic devastation wasn’t. There is "blood in the streets" across Central America, and it’s not the financial kind. Your local Red Cross chapter would love to hear from you.
For those of you who have been asking about fellow bear analyst Treehouse, here’s the link to his new site, which is still under development: http://209.1.224.11/WallStreet/Market/5880/ .
Not much happening overnight going into Monday morning trading on Wall Street. At press time at 1:00am EST, the Asian markets are narrowly mixed and S&P 500 futures trading on Globex are off fractionally from Friday’s close.
"The best thing about the future is that it comes one day at a time."
-- Abraham Lincoln
Grizzly
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