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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 670.92

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Nov 7 4:00 PM EST

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To: bearshark who wrote (36369)	1/1/2000 6:18:00 PM
From: Investor2	Read Replies (4) of 99985

Re: "They may up rates again in two more quarter point efforts and realize that the economy has continued unabated. Then they have to move more forcefully. They may also do a repeat of 1980 and 1981. They may think they have slowed things and let up too early and then have to reinstate even higher rates." They may also repeat 1994. In this scenario, they would continue increasing rates while the economy slows. The common financial wisdom will be that the Fed is going too far and that they will drive us into a recession or worse. That fear will turn out to be overblown, as the Fed will once again successfully direct us to a soft landing. The soft landing will not be enough, however, to prevent a 20%+ correction (i.e. bear market), since equity valuations are so high right now. But, to the surprise of the bears in the crowd, the soft landing will be enough to prevent the major financial crash so often predicted along with the bubble-popping theory. Best wishes, I2

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