Heinz and all, Just processed my signals basis today's action. My methodology attempts to identify trends, as opposed to overbought/oversold type conditions. The signals have a positive bias, but nothing exuberant. The market action today obviously wanted to be on the positive side of things pending tomorrow's PPI, because that was the right side to be on for all inflation reports since the April spike. Someday, it won't be the right side to be on, but tomorrow is not likely that day.
Despite the collapsing dollar, good Japanese growth, rising interest rates, declining bank stocks, Y2K worries, Greenspan supposedly targeting stock prices, bad breadth, on and on and on, this market seems to want to higher. This is not a wall of worry, it is a wall of stark-raving paranoia. Given that there are few holes in the mania as yet, it is probably safe to be long. Then, if Heinz gets his blow off top, we can all participate.
Remember how Woody Allen ended his movie "Annie Hall?" A guy goes into a psychiatrists office and says to the shrink "My brother thinks he's a chicken!" The shrink replies, "Well, bring him in and I'll cure him." "But, I need the eggs," the guy states.
Well, maybe we need this mania.
BTW, If the Fed really wanted to cool things down, they could use their ability to move margin requirements higher. The Fed was given this tool to rein-in speculative excesses. Their non-use of this tool can only be interpreted as meaning that they are not that concerned about valuations. |
