MSFT-How to make money for new investors through option. Message Board

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Technology Stocks : MSFT-How to make money for new investors through option.

MSFT 517.81

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Oct 31 9:30 AM EST

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To: Anthony Ettipio who wrote (43)	8/24/1997 10:35:00 AM
From: IQBAL LATIF	of 57

'Theory of Mutual Hostage'- Bond and Market Ahmed- I am very interested with your analogy on bonds- please read my 7161 and a report on Inflation indicators however I want to know more about your bearish views on bonds- I have decided to open up my heart give every thing I have may be it will help few- I assure you as time passes you all will ask me about NEKKEI FTSE CAC40 DAX and I will never stop telling you nice stories until you fall asleep! On inflation front there is lot of tinder around which in coming week can unsettle the markets the problem I am trying to address is that inflationary interpretations lead to a bond sell off i.e. higher yields normally such a sell off should take market through the support levels but the moment we see sympathetic selling in the equity markets the genuine correction which bonds are undergoing gets overlooked this huge mass of 'coward capital' looking for a home finds the only refuge in case of a equity sell- off in equities now I hope you are with me the problem begins from here the moment money start going into bonds the bonds rally some foolish people think this is a genuine rally but this is flight of coward capital finding its first safe haven- now with rising bond yields the equity pundits take heart in thinking bravo the market fundamentals are great bonds are rallying we have no other way to go but up- so S&P futures sold short are covered by these funny fund managers- this is the fundamental cause of gyrations in the market- we have a catch 22 situation here- if bonds sell markets sell but when markets sell bonds rally so markets rally because bonds are rallying- we have in traffic 'Sicilian deadlock' this is a kind of traffic jam where none of the cars can move and ease the jam- here this market deadlock can only be broken if: NAPM Journal of Inflation index and Employment cost index confirms stance that wage inflation and demand pull inflation is non-existant. In such a scenerio I think our yields should head to 6% in 12 months and market valuations will justify new highs. However, until above data finally seals 'inflation's fate' we will continue with these major unsettling movements in the markets, if you have a Reuters and you pull weekly S&P chart try to join the peaks you will intersect the Y-axis at 990 , a point where every technician is looking at. I have absolutely no bones about it that this fear of market valuation is clouding everyone's judgement we need to recover from this abyss, markets are forward looking indicators for economy in general and as such are sensitive to interest rates but if interest rates and markets have become hostage of each other where does it leaves a pure theoritician or an academic chartist who wants to read the market direction- charts will not dictate the future of this market because the basic relationships are skewed- in this hostage situation I will do what I did on Friday- make some money playing the market- If TA gives me an up direction I will thru my analysis of 'Mutual Hostage ' theory evolve a third way- the window of opportunity opens up every now and then with this anamoly in sight I take good advantage - these markets follow no fundamentals they follow fears and sentiments of cheeky Fund Mangers who will sell futures big time on a non-existant threat getting whipsawed every day, anyone who understands composition of cap markets and flow of global capital will realize that markets fear do have a underlying pattern and I do have a TA of Managers fear- I do it all the time even looking at modes of Jack Welch or Gates or Groove a day before earnings, where did they dine how were they acting- this is TA of CEO's which is a important ingredient of S&P trader.. This is sentiment and fear analogy of markets and will continue if you provoke me further or if it makes any sense to you may be all this unconventional approach is pure non-sense but it helps me pick turn arounds perfectly=I put this theory to test on Friday during the course of that eventful day we made 7 trades not one being on the losing side and by the way I play with stops as I don't have this luxury of carrying a position on futures beyond...some points. I know it I will apply it again whenever fundamental anamoly will exist the markets and bonds have to develop a honest relationship so far they are going thru a rough patch, whenever this happens beans are spilled- once this anamoly is corrected we go straight into a bull or a ------market where we will need lot of TA as normalcy will return.

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