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Strategies & Market Trends : MDA - Market Direction Analysis
SPY 681.76-1.1%Dec 12 4:00 PM EST
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To: Haim R. Branisteanu who wrote (60073)10/7/2000 4:12:04 PM
From: ahhaha   of 99985
 
The fundamentally based bearishness is running ahead of the fundamentally based economic reality. The MSDW position would evaporate with a rapid decline in oil price which is the culprit in exaggerating the degree of the problems.

The current stock market malaise is somewhat disengaged with reality and has firmly set its sights on reduction of excesses. Thus the game is one of undoing what the inverse psychology did when it created the excesses in the first place.

The FED is mostly to be blamed for this psychology because they pumped $200 billion in just in case there was a y2k run, and then they had to take it out. It is inconceivable that they could think y2k was going to be a problem or that a pile of currency would solve any y2k generated problem. Now they are in no position whatsoever to play with money. They're even afraid to let rates fall as the market would like, and the JCB and ECB need. They fear that prosperity in the US will now encourage the labor cost driven propensity to inflate. What keeps it down is declining foreign currencies. Thus you aren't likely to see any more significant dollar selling intervention unless they are nominally there in disorderly markets.
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