Replies to post #8978 on Zeev's Turnips Patch-No Politics (ZEEV)

[Zeev Hed]

To make a long story short, the process of the last few weeks has eliminated a lot of "weak hands" selling, Their absence will be the driver of a higher market. All the "uncertainties" you cite, are the proverbial "wall of worry" that wall street loves to climb. Actually, the uncertainty is less than it was last September and October. Then, a number of airlines were on the verge of bankruptcy, hotel chains and restaurants were reporting dismal occupancies and the uncertainty as to the impact of 9/11 on the economy was was growing by leaps and bounds, and what was the market doing? The Naz advanced full 50% Why? During these first two weeks after the market reopened, any potential seller, sold, there were no sellers left to stop the rally, and ample fuel from short sellers buying.

Zeev

[Rick Louden]

mlsft, What are you seeing as a driver for the strong rally you anticipate??

Although you didn't address this question to me, I thought I'd comment since I see a strong case for a rally. You mentioned numerous issues that could cause concern, but I believe just one of those issues was not been fully built into the market prior to July 1. The issue is that CEO's need to sign that there are no accounting issues. Imagine the work going on in the last month or so as the CEO's pass that down to the business unit heads requiring them to sign a statement also, and they pass that on down to distict heads, etc. In most companies, the CEO's will require that the responsible people below him sign a statement also as a CYA measure and also since it is virtually impossible for a CEO to know everything that might be going on in a big company. As this process occurrs, everyone is watching Worldcom, Imclone, Adelphia, etc and managers who were normally quite "flexible" on how they intrepret accounting issues have developed a strong moral backbone and become leaders of the fight against accounting abuse. As this evolved, 2nd quarter earnings didn't come in quite as high as the market really expected and expectations and growth rates going forward became much more difficult to forecast. Forward projections were lowered and "visibility" evaporated. After all, if you can't use your accounting manipulations, how can you guarantee future earnings.

So, why are we about to rally........this process leading to August 14th CEO accountability day is winding down and about built into the market. The bad news should be out by now or known by the market movers. So, the closer we get to August 14th, the more likely the market will move up. If by some chance it bounces around until the 14th, it should explode once the 14th passes and the news is officially out.

Tom