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Strategies & Market Trends : Ask DrBob

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To: Chip McVickar who wrote (19294)	1/3/2001 4:45:09 PM
From: ggift1	Read Replies (2) of 100058

Re: Hahns trend change is pointing to January 11 Here is a brief overview of last nights time table discussion. A near-crash surprised investors today. Many high flyers that had been some of the best performers in 2000 were sold off today as investors captured gains while there were still gains to be captured. The next event to happen will probably be some kind of further panic capitulation as those “late to the game” fear losing opportunity. This could happen as early as tomorrow or may be delayed on speculation of Federal Reserve rescue. We also have a lot of “time” on January 11. At any rate, we're close to some kind of low. Countertrend rallies from lows in a bear market are fast and furious, so it's not a good time to short the market, either. It's fair to ask if January 11 is going to be a high or a low. I get 50 emails per day asking me that question, so here's my best guess for strategy. The market is anticipating an interest rate cut on Friday following the NFP report. If the unemployment report is near record low (4.0%) levels, the Federal Reserve will not cut rates regardless of the pain in the stock market. Disappointment emanating from “no rate cut decision” could culminate in a low on January 11, which is one day ahead of the January 12 PPI report. That's my best guess for now! Let's say my best guess is exactly wrong! It would still be a bearish scenario because of the predominance of the January 11 date from the wave projections on this page. That means if we get an interest rate cut, the rally will have run its course by January 11 and the market will be in prime position for short positioning.

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