I would like your opinion on where the Nasdaq will be a month from today. I believe that it will crash hard, going down below 3500. Why? * Interest rates are rising with no end in sight. Alan Greenspan and the Fed have clearly indicated that they are afraid of the inflation that the superheated economy threatens to produce. * The DOW, S&P, and overall market are down for the year and struggling to move ahead. Only the Nasdaq is making new highs. * Oil is surging towards $30 and above. The truckers, airlines, and northeastern residences are already feeling the pain. * Gold is recovering from the lows that it set less than six months ago. * Finally, the NASDAQ 100 is selling for more that 100 times earnings. I believe that the greater fool syndrome is about to end. What do you think?

-- Mr. Adequate (mr@adequate.com), February 11, 2000

Answers

And if the Nasdaq does crash, then what? What exactly will happen in the aftermath, what will be affected? How will this play out into the general economy. Have done a lot of reading on the crash of 29, and remember 87(?)but see so many factors that are different today than in 29. Do you see inflation, deflation, recession, depression? Just wondering.

-- suzy (HAYSandCO@aol.com), February 11, 2000.

Don MacAlvany and many others have been predicting a Market crash since 1993. After 3 years of believing them and staying out of the Market and losing thousands of un-earned profits, I jumped in and did real well ever since. I'm very careful not to put all my money in all at once. I keep most of my profits in reserve and play the market with only about $5000. Half the time I'm into Put Option positions, so when the Market crashes, My Puts will do very well. I just started trading the Nasdaq and have 15 favorite stocks that I trade. I make a real nice living from trading Call Options and Put Options. I usually take little bites out of the Market by day trading. That seems to work the best for me. I'm not going to let crash predictions keep me out of the Market, since I do not put all my money in it. If I lose $5000, no big deal.

-- freddie (freddie@thefreeloader.com), February 11, 2000.

Freddie,

Recently you've mentioned Dow Chemical and Motorola as two of the Stocks you play with Calls and Puts, and I'm dying to know more! What books or courses do you recomend, or have you learned the market on trial or error?

I was a lurker here from about July of 99 forward before starting to post around December, and of all the people who have posted here on fianances and investments you make the most sense to me. Any help you could give me would be greatly appriciated.

Thanks,

-- Zdude (zdude777@hotmail.com), February 11, 2000.

Mr Adequate--

I agree with you but I do not know how to time it, and I am too chicken to short stocks or buy puts.

If you are not as cowardly as I, just put your money on the market dropping instead of rising. TPTB cannot manipulate the market in both directions at the same time, for those of you who are conspiracists (and I'm not suggesting Mr Adequate takes this view).

-- ImSo (lame@prepped.com), February 11, 2000.

ImSo,

I do not believe in shorting the market because I could lose more than I invest. I have just moved almost all of my investments into cash. I will return to stocks after the crash. I am a long-term bull, but what is going on now is the same as gambling in Las Vegas.

-- Mr. Adequate (mr@adequate.com), February 11, 2000.

Ah yes, THIS time is different. I believe that phrase was also used in 1929. And diesel & heating oil over $2.00 per gallon will have absolutely no negative effects on our economy. Bubble.com thinking pervades all current thinking. I wonder how they'll sell the sleeping sheep on how and why the bubble finally burst???

Will the stock markets actually take a tumble? Sure, but when and how? Unless you've got the proverbial nerves of steel--good luck in making money this year long OR short! The Plunge Protection Team is actively manipulating the various markets--keeping gold down--keeping stocks up--but even they can't plug up the derivatives market when and if it crashes. At least not without making the dollar equal the Mexican Peso.

-- VeryConcerned (About@Bubble.com), February 11, 2000.

The truckers are feeling the heat. Prices will rise. But this won't be inflation? I laugh at the NASDAQ going up. Did they think the advice was "Buy high, sell low?" Okay, we'll see. My money is not in the market. 10-year inflation-adjusted Treasuries (sure, I know, they aren't admitting it) and g-o-l-d.

-- Mara (MaraWayne@aol.com), February 11, 2000.

In my opinion nothing is going to happen to this market on Clinton's watch. If you hae been watching, on numerous occasions this thing should have gone bust, but every time a miracle happens and off it goes again. Not on Clinton's watch, not on the Democratic leadership, nothing but up until at least Nov. You could get killed shorting this market. Do be careful.

-- thinkIcan (thinkIcan@make.it), February 11, 2000.

Wrong. There is nothing that MUST happen.

-- (nemesis@awol.com), February 11, 2000.

The Dow is already in a bear market. The telling tale will be the $100 Trillion plus derivatives market. The major market movers (crude oil, gold, etc.) have begun to shake up an already unstable global financial situation. This enormous market in its entirety, is impossible to manipulate, even by the biggest "players." Certain segments of the market, perhaps, but as a whole, it cannot happen. Derivatives can profoundly effect the Dow, NASDAQ, etc., and especially in our present climate of uncertainty. The magnitude of risk in todays markets is enormous. The amount of money at stake is unprecedented. We are entering the final chapter and in the last leg of this longest bull market in history. I will continue purchasing S&P "LEAP" put options, put options on certain airline stocks and e- commerce companies, and gold and silver. Attention passengers, please wear your seatbelts, we`re in for a very rough flight.

-- NoJo (RSKeiper@aol.com), February 11, 2000.

I agree with NoJo. The beauty of the markets is that there's always another side to the discussion and always someone ready to take advantage of any moves. That's why there's such an emphasis on transparency and why participants get so torqued when they determine that someone's playing games with information.

Support levels for today appear to be: Dow - 10560; S&P500 - 4400; Nasdaq COMP - 1390. All got tested at least twice this morning.

-- DeeEmBee (macbeth1@pacbell.net), February 11, 2000.

Well. *ahem* So much for those levels, but the markets could still recover. It's now the "fourth quarter" (2PM-4PM) and the markets have been very, very volatile of late as they head toward the close. Still plenty of time for a comeback. The COMP especially can easily move 2% in an hour.

-- DeeEmBee (macbeth1@pacbell.net), February 11, 2000.