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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 683.47

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Nov 28 4:00 PM EST

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To: Daveyk who wrote (25007)	9/7/1999 8:37:00 AM
From: HairBall	Read Replies (3) of 99985

Dave kilty: They aren't going to stuff that cash under the mattress are they? Actually, some folks probably will. I think many will take some cash out of the bank as a hedge against Y2K. In addition, look for folks to reduce exposure to equities, some will go completely to cash. Even if there are "no" Y2K problems, I believe defensive posturing will create an effect. Folks that expect this to be at least a self-fulfilling event, will hedge against the hedgers and contribute to event. (I will be one of those...<g>) The US Bond Market is likely to get inflows from offshore investors looking to park monies in the country they perceive as best prepared to weather any Y2K events. If that occurs (I believe it will) it should be a primary catalyst for a bond rally and rate decline later this year. And since much of that money will come from equity Markets, look for a decline in equities. I believe the charts have been signaling this for months. The Market is going to experience a significant pullback this year in unison with a bond rally and rate decline. Once this begins to happen, cash instruments will be your friend, medium term. The trick as always will be timing. When will folks begin to prepare? Chart formations are patterns of investor behavior and or sentiment. Chart formations building all year are signaling that from now through the end of October should be the window for this activity to start, as folks move to be a little ahead of the pack. Regards, LG Disclaimer: The above is my opinion only and I reserve the right to be wrong. Do not base any investment decision solely on anyone person's views or analysis. Do your own research and take responsibility for your investment decisions.

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