[eastsider]

If you are looking for an exit point and have remained fully invested, these kinds of mini-rallies should be used to get out and invest in defensive bear market investments.

It was a comment from you similar to this one that I credit with having saved me thousands of dollars. Thanks again.

A bear market is what we are now in, and this bear has a long way to go before it will end. The second phase of this bear is going to produce more damage than the first phase.

I heard on the business news this morning (WCBS-AM, New York) that markets were also down prior to the Gulf War, but that they went up when the battle was actually joined. Clearly, the listeners were being asked to induce that a similar downturn is occurring now as rumors of war abound, but that the market will recover when we finally act to oust Saddam. How does this kind of "geopolitical" analysis fit into the Phase II theory?

[rohry]

"It was a comment from you similar to this one that I credit with having saved me thousands of dollars. Thanks again."

Give yourself a pat on the back, it was you that swallowed the bullet and made a move contrary to most of the "experts."

"How does this kind of "geopolitical" analysis fit into the Phase II theory?"

The markets were clearly into full bear phase before 9/11. Since then the pundits have used it and any number of other "explanations" as to why the market is losing value despite unprecedented Fed rate reductions, loose credit and massive government spending increases. The coming Gulf war is another excuse for the market seeing further lows. But, they claim, it will proceed back up to Dow 36,000 soon after the war is concluded.

Needless to say, I don't buy it.