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Strategies & Market Trends : MDA - Market Direction Analysis

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Nov 14 4:00 PM EST

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To: Tunica Albuginea who wrote (37635)	1/19/2000 9:37:00 AM
From: Crimson Ghost	Read Replies (1) of 99985

Shepler Capital Management -- very bullish last fall -- now ultra bearish Shepler Capital Management: January 18-21,2000 Playing Chicken with the Fed! The stockmarket continues to play a game of chicken with the Fed and the bond market. In a Thursday speech "Bubble Boy" Greenspan attempted once again to jawbone the market, stating that interest rates will continue to rise if the meteoric rise in equity prices does not abate. In response stock traders racked up another triple digit gain for the Nasdaq bubble on Friday. This is equivalent to traders thumbing their noses at "Bubble Boy" Greenspan, in effect daring him to try and stop this runaway bull market. This is a very dangerous game of chicken for bulls. Even if "Bubble Boy" blinks and proves to be all bark and no bite (as his past actions have proven), bond traders are likely to be somewhat less accomodating in their response to this market bubble. Therefore the yield on the 30 year Treasury Bond will continue to climb until it strangles the economy and the stockmarket. The Fed is already behind the curve and unless "Bubble Boy" begins and aggressive tightening campaign very quickly they will just fall further behind the curve. This in turn will put the odds of another Fed engineered soft landing at slim to none. History has proven again and again that it is not wise to own stock in a negative interest rate environment like the present one. So as the Nasdaq flirts with the record books in the days ahead we will be selling the rallies. And despite the early euphoria we fell that this year will be a very ugly one for bulls when all is said and done. We see upside potential at 2-3% with downside potential of 35-50% for the Nasdaq bubble over the coming months. (c) 1999. Bill Shepler - You can write to Bill at wshepler@yahoo.com

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