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Strategies & Market Trends : Tech Stock Options

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To: donald sew who wrote (43805)5/22/1998 5:30:00 PM
From: Lee   of 58727
 
Hi Donald,...Re:<<I believe that for the main fundamental issue is if interest rates can stay below 6%. >>

Looking at the chart below, we have been in an interest rate range of 5.75% to 6.1% since Jan. In MHO we have nearly equal forces which will tend to keep bonds in this range until one of the forces becomes excessive.
chart1.bigcharts.com:80/report?r=chart&onbad=badsymbol&country=us&time=7&freq=1&compidx=aaaaa%3A0&ma=4&maval=9&uf=7168&lf=1&type=2&style=3&size=2&symb=TYX&comp=&sid=11421&sec=x&xyz=11608984&s=7752

To keep rates below 6% and falling -
-Decreasing supply from the Fed because of increased tax receipts
-Decreasing CRB
-Flight to quality for SE Asia flare ups
-CPI yr/yr of 1.4%
-Strong Dollar

To keep rates at 6% and rising -
-Increasingly tight labor market
-wages rising 4.4% yr/yr
-Decreasing productivity which tends to offset rising wages
-Increasing wage pressure in the tech industries
-continued GDP growth >4%
-Dollar weakness

Needless to say, any change in commodity prices can affect CRB quickly, (i.e. grain prices, crude, cu, etc.) but offsetting these may be the continual decline in treasury offerings causing increased 'demand'.

JMHO

Regards,

Lee
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