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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club
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To: marc ultra who wrote (8918)9/28/1999 11:07:00 AM
From: Hank Stamper   of 15132
 
So from a technical perspective--market unable to move beyond the area of the old highs concomitant with distribution--the market demonstrates topping-like behaviour. From the perspective of fundamentals, BB has said many times over the last six months that the requisite conditions for a substantial move higher, include lower interest rates. One would assume that lower rates would also be accompanied by growth in money supply.

Is this not the key? So what are the prospects for lower rates and money supply growth?

Lower interest rates will only occur if business cools off substantially. However, one of the legs holding up the highly valued market is record corporate profits. Take that away and the platform--the stock market--will fall. This is a sort of Alice situation. She encountered the Gnat who told her about the Bread And Butterfly--its food was weak tea and milk. Since its body was made from a sugar cube, Alice saw a problem: if it drank its tea, it would dissolve and die. If it didn't drink, it would starve and die. The gnat's response was impirious and instructive: 'Oh yes, they all die.' A classic double bind. That, I think, is the current status of the market--in order to go up it has to go down.

Ciao,
David Todtman
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